India and the United States have agreed on a framework for launching discussions on the first phase of a bilateral trade agreement, according to a trade official who made the announcement on Friday. The talks, which are set to begin soon, come with an optimistic outlook from both sides and a hope that a mutually beneficial agreement could take shape within the next three months.
Speaking on the condition of anonymity due to the delicate nature of the negotiations, the official said, “We are far ahead in trade talks with the U.S compared to other countries… there are lots of possibilities in 90 days.” This suggests a significant advancement in discussions, indicating that both countries are close to narrowing down common areas of interest and potential compromise.
This development comes at a crucial time as trade between India and the United States continues to grow. The U.S. remains India’s largest trading partner, with bilateral trade exceeding $118 billion in the 2023-24 financial year. This upward trajectory underscores the increasing importance of the relationship between the two economies, especially at a time when both are seeking to recalibrate their global trade strategies.
Just a day before the announcement, Reuters had reported that India was eager to accelerate its push for a trade deal with the United States, particularly in light of a recent policy shift from President Donald Trump. His administration decided to pause reciprocal tariff arrangements for several countries, including India. This move by Trump has opened up a new window of opportunity for New Delhi to seek favorable terms in a direct trade agreement with Washington.
President Trump’s recent tariff policy has created a new urgency in India’s trade diplomacy. Last week, his administration imposed a 26% tariff on Indian goods entering the U.S. market. Despite this, India has opted not to retaliate with its own tariffs on American products, a decision that is likely to keep the environment conducive for dialogue and cooperation.
The trade official noted that ongoing negotiations between the two countries would not be limited to physical meetings. “Trade engagements between the countries will continue virtually and regularly,” the official said, highlighting the commitment to maintaining momentum in the dialogue even in the absence of face-to-face discussions.
India’s decision not to retaliate against the steep U.S. tariffs appears to be a strategic one, aimed at keeping the larger goal of a bilateral trade agreement on track. The choice to avoid immediate countermeasures demonstrates a willingness to prioritize long-term economic partnership over short-term trade tensions.
According to the same official, the finalized terms of reference between the two sides have laid the foundation for substantive discussions. These terms will guide the upcoming engagements and serve as the basis for identifying key issues, sectoral interests, and areas where mutual concessions can be made.
The notion of a “win-win shape and form” to the agreement over the next 90 days reflects optimism that the first segment of the trade deal could yield benefits for both countries. Although specific details of the potential deal were not disclosed, the positive tone suggests that discussions may center around areas of shared interest, including tariffs, market access, regulatory alignment, and trade facilitation.
India and the U.S. have had a complicated trade relationship over the years, with both collaboration and conflict defining their interactions. From disputes at the World Trade Organization to negotiations over digital taxes, agricultural subsidies, and intellectual property, the two countries have seen their share of disagreements. However, the strategic partnership between them continues to strengthen, particularly in areas such as defense, technology, and energy, laying the groundwork for a closer economic relationship as well.
The finalization of the terms of reference and the commitment to regular, virtual trade engagements signal a desire to shift the tone of the relationship from reactive to proactive. Both nations seem to recognize the importance of building stable, predictable trade ties, especially in a global environment marked by economic uncertainty and shifting geopolitical alliances.
India’s willingness to move swiftly is partly driven by its desire to secure preferential market access for its exports while also seeking to reduce dependence on other markets. Meanwhile, the U.S. is likely to see India as a key partner in diversifying its trade portfolio and countering supply chain vulnerabilities, especially in the wake of disruptions caused by the COVID-19 pandemic and ongoing tensions with China.
Although the announcement of the finalized terms marks only the beginning of what could be a complex and lengthy negotiation process, it represents a significant step forward. If both sides manage to stick to the timeline and navigate political and economic sensitivities carefully, the result could be a landmark agreement that reshapes the trade landscape between the world’s largest and fifth-largest economies.
The next three months will be crucial as both governments attempt to hammer out specifics and address sensitive issues without triggering domestic opposition or trade blowback. Given the high stakes involved and the current political context, including the upcoming U.S. presidential elections, the pace and content of negotiations could be influenced by broader strategic considerations.
Still, the readiness to engage, the positive language from officials, and the absence of immediate retaliatory actions are encouraging signs. The coming weeks are likely to witness intensive virtual discussions involving a wide range of stakeholders, including ministries, trade representatives, industry leaders, and policy experts from both countries.
While trade negotiations are never easy, the fact that both India and the U.S. are expressing strong interest in reaching a preliminary deal in the near term is an indication of the importance both attach to this relationship. For India, deeper integration with the U.S. economy could bring in new investments, access to cutting-edge technology, and expanded markets for its goods and services. For the U.S., strengthening economic ties with India offers a strategic counterweight in the Indo-Pacific region and a reliable partner in securing resilient supply chains.
As negotiations continue, much will depend on the ability of both sides to manage expectations, make politically viable compromises, and maintain trust. But if the initial optimism holds and the projected timeline of 90 days is met, the two countries could be on the verge of formalizing a partnership that is as economically significant as it is strategically meaningful.
In the words of the trade official, “There are lots of possibilities in 90 days.” Whether those possibilities translate into a signed agreement remains to be seen, but the foundations have now been laid for what could be one of the most important trade developments in recent years.