India, US Actively Working On Finalizing Bilateral Trade Deal, Says Commerce Minister

Paris | June 2 — India and the United States are actively working on finalizing a proposed bilateral trade agreement aimed at significantly expanding trade and offering preferential market access to each other’s businesses, Commerce and Industry Minister Piyush Goyal said during his visit to Paris.

The agreement, announced in February by Prime Minister Narendra Modi and US President Donald Trump, is envisioned as a multi-sector deal with the first phase expected to be finalized by September–October 2025. The goal is to more than double the bilateral trade volume from the current USD 191 billion to USD 500 billion by 2030.

Addressing the reporters Goyal stated “Both countries are committed to work together, and both desire to give preferential access to each other’s businesses. We are working towards the bilateral trade agreement.”

US Tariff Hike Sparks Bilateral Concerns

Goyal’s remarks come amid growing concerns over the US decision to double import tariffs on steel and aluminium. President Trump announced on May 30 that the existing 25 percent tariff on steel and 10 percent on aluminium would be increased to 50 percent and 25 percent respectively, effective June 4.

When questioned about this development, Goyal emphasized continued dialogue between the two nations. “Let us wait and watch… both the US and India share good relations, and we will continue to work together to resolve all these issues bilaterally,” he said.

Trade observers caution that the increased tariffs may adversely affect Indian exports, particularly value-added steel products and auto components. In FY 2024-25, India exported USD 4.56 billion worth of iron, steel, and aluminium products to the US, including USD 587.5 million in iron and steel, USD 3.1 billion in articles of iron or steel, and USD 860 million in aluminium and related articles.

Preserving its right to impose retaliatory tariffs in response to these hikes, India has already lodged a formal notice with the World Trade Organization (WTO).

Interim Trade Deal Expected by June-End

A US trade delegation is currently in India to advance discussions on an interim agreement, which may be finalized by the end of June. New Delhi is pushing for a complete exemption from the 26 percent reciprocal tariff on Indian goods.

India’s Special Secretary for Commerce, Rajesh Agrawal, recently concluded a four-day visit to Washington, where he held talks with US officials on the framework of the proposed agreement. Minister Goyal also visited Washington to boost momentum in trade negotiations.

There is growing optimism that an interim deal may be inked ahead of the finalization of the first tranche of the broader agreement.

The US continues to be India’s largest trading partner for the fourth consecutive year, with bilateral trade reaching USD 131.84 billion in FY 2024-25. The US accounts for 18 percent of India’s exports, 6.22 percent of its imports, and 10.73 percent of its overall merchandise trade.

EFTA Pact Brings $100 Billion Investment Boost

Separately, Goyal highlighted the progress on India’s free trade agreement with the European Free Trade Association (EFTA), which includes Iceland, Liechtenstein, Norway, and Switzerland.

He clarified that the USD 100 billion foreign direct investment (FDI) commitment under this agreement does not include stock market inflows via foreign institutional investors (FIIs). “This is solid FDI coming into the country with technologies,” he said.

According to Goyal, the investment will trigger a cascading economic effect, catalyzing infrastructure growth, job creation, and sectoral development, potentially leading to USD 500 billion in total economic impact.

The Trade and Economic Partnership Agreement (TEPA) with EFTA was signed on March 10, 2024, and is expected to be implemented before the end of this year. It includes tariff reductions on Swiss watches, chocolates, and polished diamonds, among other goods.

When asked whether a similar arrangement is expected with the European Union, Goyal responded that since individual EU member states are already major investors in India, a similar commitment model may not be necessary in the ongoing FTA talks with the 27-nation bloc.

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