The Terms of Reference (ToR) for the Bilateral Trade Agreement (BTA) between India and the US was recently announced. This agreement outlines a roadmap for multi-sector negotiations.
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ABP Live Deep Dive | Inside The Phased India–US Trade Agreement After PM Modi–Trump Call
ABP Live Deep Dive | PM Modi–Trump call underscores progress, phases, and impact of the India–US trade agreement.
In 2024, the United States recorded a goods trade deficit of $45.7 billion with India, while total bilateral goods trade reached $129.2 billion.
Source : ANI
ABP Live Deep Dive | Prime Minister Narendra Modi and US President Donald Trump held a detailed phone conversation today during which they discussed tariffs, global conflicts, bilateral trade, and strategic cooperation. Following the call, President Trump shared his views on Truth Social, while Prime Minister Modi also posted on X, offering insights into the discussions and reaffirming the shared commitment to strengthening India–US ties. The conversation also moved toward the bilateral trade agreement, with both sides taking stock of progress across different phases.
The framework included a phased approach, with subsequent stages of the agreement scheduled in 2025, forming the backbone of the broader India–US economic partnership currently under implementation.
Progress On India–US Bilateral Trade Agreement
A key milestone has been reached with US Vice President JD Vance and Prime Minister Modi announcing the Terms of Reference (ToR) for the Bilateral Trade Agreement (BTA). This development builds on work initiated during PM Modi’s visit to Washington on February 13, 2025, when he and President Trump agreed to formally launch negotiations.
The COMPACT framework has set a results-driven agenda, with initial outcomes already forming the basis of deeper engagement and trust between the two sides. The Terms of Reference now define a clear roadmap for multi-sector negotiations, guiding structured discussions aimed at delivering reciprocal benefits. From the US perspective, the objectives include expanding market access, reducing tariff and non-tariff barriers, and securing a comprehensive set of commitments to support long-term economic cooperation.
Addressing Trade Barriers And Market Access
Trade discussions are also addressing long-standing market access issues. In 2024, the United States recorded a goods trade deficit of $45.7 billion with India, while total bilateral goods trade reached $129.2 billion. US officials have acknowledged tariff reductions announced by India during PM Modi’s February meeting with President Trump, along with India’s readiness to pursue further calibrated tariff adjustments under the BTA framework. Official data shows India’s average applied tariff rate at 17%, compared to 3.3% in the United States, with agricultural tariffs averaging 39% in India and 5% in the US.
Alongside tariffs, negotiations are engaging with technical, regulatory, and sector-specific market access issues across services, industry, and agriculture.
Trade Talks Within Broader Strategic Context
The Bilateral Trade Agreement discussions are taking place alongside the United States’ America First Trade Policy, which focuses on strengthening domestic industry while pursuing reciprocal trade relationships. Earlier, on April 2, 2025, President Trump announced a 10% baseline tariff and reciprocal duties for countries with significant trade imbalances, reinforcing the emphasis on balanced trade. Within this framework, the Terms of Reference with India represent a significant step forward in advancing reciprocal trade with a key strategic partner.
The ongoing negotiations continue to shape a comprehensive economic partnership aimed at delivering tangible outcomes, reinforcing trust, and deepening India–US cooperation across trade, technology, and strategic sectors.
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Frequently Asked Questions
What key agreement was recently announced between India and the US?
What is the COMPACT for the 21st Century and what does it aim to achieve?
The US-India COMPACT for the 21st Century is an initiative focused on cooperation in military partnership, commerce, and technology. It aims to create a results-driven agenda for deeper engagement.
What are the main objectives for the US in the bilateral trade agreement negotiations?
The US objectives include expanding market access, reducing tariffs and non-tariff barriers, and securing commitments to support long-term economic cooperation.
What are the current tariff differences between India and the US?
India's average applied tariff rate is 17% compared to 3.3% in the US. Agricultural tariffs are significantly higher in India at 39% versus 5% in the US.
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