PROGRESS TOWARD A BILATERAL TRADE AGREEMENT: Today, Vice President Vance and Prime Minister Modi announced the Terms of Reference for a bilateral trade agreement between the United States and India.
- This announcement elevates significant work done since February 13, 2025, when Prime Minister Modi visited President Trump and the two agreed to launch negotiations for a Bilateral Trade Agreement between the United States and India.
- During that visit, the “U.S.-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century” was launched.
- The goals of this initiative are to drive transformative change across key pillars of cooperation and commit to a results-driven agenda with initial outcomes this year to demonstrate the level of trust for a mutually beneficial partnership.
- The Terms of Reference announced today by Vice President Vance establish a roadmap for mutually beneficial, multi-sector Bilateral Trade Agreement negotiations.
- Goals for the United States include increasing market access, reducing tariff and non-tariff barriers, and negotiating a robust set of additional commitments to ensure long-term benefits.
NEGOTIATING TO ADDRESS BILATERAL TRADE BARRIERS: The United States has long recognized significant trade barriers with India. As a result, the United States ran a $45.7 billion goods trade deficit with India in 2024, a 5.1% ($2.2 billion) increase over 2023. The United States welcomed the tariff reductions India implemented during the Prime Minister’s meeting with President Trump in February and its willingness to further reduce tariffs on U.S. products as part of the BTA.
- U.S. total goods trade with India was an estimated $129.2 billion in 2024.
- India’s average applied tariff is 17%, among the highest of the world’s largest economies, while the U.S. average applied tariff is 3.3%.
- India’s average applied tariff rate on agricultural products is 39% while the U.S. average applied tariff on agricultural products is just 5%.
- In addition to tariffs, technical barriers to trade, regulatory barriers, and restrictions on access to the market in the services, industrial, and agricultural sectors also reduce U.S. exports to India.
- On April 2, 2025, Liberation Day, President Trump imposed a 10% tariff on all countries and individualized reciprocal higher tariffs on nations with which the U.S. has the largest trade deficits in order to level the playing field.
ADVANCING AMERICA FIRST TRADE POLICY: Since Day One, USTR has been working diligently to move forward on America First Trade Policy to unleash investment, jobs, and growth on our soil and deliver benefits for American workers, manufacturers, and agricultural producers.
- The TOR announcement with India is a critical step forward in negotiations with India to achieve reciprocal trade with one of our most strategic partners and deliver results to the American People.
Sources: U.S. Census Bureau and WTO
