India is looking at a sprint in its trade negotiations with the US over the next 90 days and is targeting tangible outcomes that could stave off the additional reciprocal tariffs put on hold by Washington late on Wednesday, people aware of the matter said.
If the negotiating teams achieve concrete milestones within this timeframe and prepare a draft bilateral trade agreement (BTA) ready for formal approval, the US could abandon reinstating the additional reciprocal tariff for India after the 90-day period, said two officials with direct knowledge of the matter.
“Both teams are working overtime to showcase one of the first major bilateral deals of Trump’s second term,” one of the officials said.
The trigger for the race to clinch a deal was US President Donald Trump’s surprise turnabout late on Wednesday when he announced in a social media post he was reducing for 90 days the reciprocal tariffs to the baseline 10% for all trading partners except China, on which he raised the tax rate to 125%. White House on Thursday clarified Chinese imports would now have to pay a total 145% tariff.
Tariffs on exports from India were to draw a levy of 26% until the reprieve announced by Trump brought it down to 10%.
{{/usCountry}}Tariffs on exports from India were to draw a levy of 26% until the reprieve announced by Trump brought it down to 10%.
{{/usCountry}}The people quoted above pointed out that the proposed BTA has been endorsed at the highest levels by Prime Minister Narendra Modi and President Trump, ensuring top-level political backing. Additionally, both sides appear equally motivated to conclude a mutually beneficial agreement in record time, with teams “intensely engaged through virtual mode,” the officials said.
“We could fast-track the talks because both partners are equally desirous to achieve a win-win deal,” the first official explained. “After the two leaders spelled out their vision in the joint statement, commerce minister Piyush Goyal went to America and met both the US commerce secretary and the US trade representative. Based on their discussions, the US sent its negotiating team to New Delhi. It was the first such visit to any country by officials of the Trump administration.”
The first phase of the deal is expected soon and will cover the “low hanging fruits” while addressing immediate trade concerns of both sides, the first official said. A more comprehensive agreement will follow subsequently in line with “Mission 500” — the vision outlined by Modi and Trump to boost bilateral trade from about $200 billion to $500 billion by 2030.
This provides some relief to Indian exporters, particularly those exporting seafood items such as shrimps, according to the second official.
In a meeting with members of various export promotion councils and industry representatives on Wednesday, Goyal emphasised that the negotiating team is working with “speed for a BTA, but not in a haste.”
“The country is working in a proactive manner and exploring solutions which are in the best interest of the nation. The team working on BTA is exploring the right mix and the right balance,” a commerce ministry statement quoted Goyal as saying on Wednesday. He exhorted exporters “to not panic and look at the silver lining in the present scenario,” assuring them that the team is “working with speed but not in undue haste to ensure the right outcome for the country.”
The first official quoted above said the government has extended help to Indian exporters to scale up operations, enhance quality and become cost competitive to encash the opportunities the changed trade scenarios offer. “It is open to provide sectoral assistance, if that is required,” this person added, noting that India could leverage its “huge comparative advantage with China in the American market.”
The 90-day pause provides a crucial window for both countries to make substantial progress on some sticky aspects of the negotiations. US Trade Representative Jamieson Greer noted some that needed addressing as “intellectual property and structural barriers to trade.”
For India, which has consistently taken a measured approach to the tariff situation rather than announcing immediate retaliatory measures like Canada, China, and the European Union, the pause and accelerated BTA negotiations validate its diplomatic strategy focused on structured dialogue rather than confrontation, the second person above added.
India exported goods worth $60.04 billion to the United States during April-December 2024, marking a 5.76% year-on-year increase, according to commerce ministry figures. During the same period, imports from the US reached $34.29 billion, up 4.63%, creating a substantial trade surplus for India.