India, US close to wide-ranging trade deal, skip patents
For the world's biggest economy and the fourth largest, signing a trade deal has been a rocky affair, marred by US insistence on access to India's agri and dairy sectors and its demand that New Delhi stop buying Russian oil. Finally, the weather has cleared, and a comprehensive deal is on the way.
As India and the US inch closer to the timeline to finalize a trade deal, both sides are moving towards signing a comprehensive Bilateral Trade Agreement (BTA) that will cover nearly every aspect of commerce, from tariff reduction and easing of non-tariff barriers to expanded access in services and energy cooperation.
The joint statement issued by Prime Minister Narendra Modi and US President Donald Trump on 13 February had set the goal of concluding the talks by the fall of 2025. The leaders had resolved to deepen the US-India trade relationship to promote growth that ensures fairness, national security and job creation. To this end, the leaders set a bold new goal for bilateral trade—'Mission 500'— aiming to more than double total bilateral trade to $500 billion by 2030.
The proposed trade agreement, for which discussions are underway, saw both sides initiate talks after over a month-long deadlock, with the US delegation visiting New Delhi on 16 September, followed by the Indian team, led by Union minister Piyush Goyal, visiting Washington and holding talks from 22 to 24 September.
Comprehensive deal
“The pact will cover key sectors like defence, energy, goods trade, technology, space, and atomic energy, but issues such as patents and certain regulatory matters will stay outside its scope," said the first among the two cited above. “It will also include services and investment flows, while addressing procedural barriers that businesses face in accessing each other’s markets."
- India and US finalizing comprehensive deal, excluding patents and regulatory matters.
- Goal: "Mission 500" bilateral trade, aiming for $500 billion by 2030, set by leaders.
- Trade deal covers defence, energy, technology, services, investment and procedural barrier reduction.
- US tariffs on India reached 50% due to Russian oil purchases, hurting key export sectors.
- Indian exporters are diversifying markets, including China and UAE, to counter high US tariffs.
India’s exports to the US increased from $34.21 billion in FY25 (April–August) to $40.35 billion in FY26 over the same period, an increase of 18.0%. Imports also grew by 8.5%, from $19.91 billion to $21.61 billion. This brought total bilateral trade between India and the US during the period to $61.96 billion in FY26, up from $54.12 billion in FY25, marking a growth of 14.5%.
Queries sent to the ministries of commerce and external affairs remained unanswered.
Both sides have held five rounds of face-to-face talks, and the sixth round, which was scheduled to take place from 25 August, was stalled amid a stalemate over the US insistence that India open critical sectors such as agriculture, dairy and GM crops for US products. The issue was first reported by Mint on 11 June.
Good progress
“The talks are progressing well, and we are hopeful of finalizing the deal within the timeline specified in the joint statement," the second person said.
In response to a query, the US embassy spokesperson said, “We refer you to the USTR for specifics on trade negotiations." “We value our ongoing engagement with the Government of India on trade and investment matters and look forward to continuing to advance a productive and balanced trade relationship between our two countries," the spokesperson said.
The deal with the US is critically important for labour-intensive sectors such as textiles, gems and jewellery, leather products, agricultural products, and shrimp, as these sectors face significant threats.
As per commerce ministry data, bilateral trade with the US stood at $131.84 billion in FY25, with exports of $86.51 billion and imports of $45.33 billion, resulting in a trade surplus of $41.18 billion. In FY24, exports were $77.52 billion and imports $42.19 billion, taking total trade to $119.71 billion, with a trade surplus of $35.33 billion.
Russian hurdle
Earlier, Mint reported on 25 September that the US has asked India to give an assurance that it will taper its purchases of Russian oil and boost imports of American crude before a trade deal between the two nations can be finalized.
The US has imposed a punitive 25% tariff on India for buying Russian oil, which came into effect on 27 August, while another 25% tariff on India, levied as a reciprocal measure, has been in force since 7 August. Currently, India is facing the highest US tariff of 50%, which is equal to Brazil’s, while all other US trade partners are subject to lower tariffs.
India’s merchandise exports to the US, its largest trading partner, fell by a massive 22.2% from $8.8 billion to $6.9 billion between May and August 2025, according to a new report by the Global Trade Research Initiative (GTRI). US tariffs on Indian goods rose from 10% in early August to 25% from 7 August, and finally to a record 50% by the end of the month.
“It is crucial to stabilize exports, protect India’s market share in the US, and safeguard jobs in key sectors such as textiles, gems and jewellery, seafood and pharmaceuticals. If immediate action is not taken, the high tariffs could cause lasting setbacks to India’s export growth," said Ajay Srivastava, founder of GTRI.
Diversification
To reduce the impact of US tariffs on manufactured exports, Indian exporters are diversifying their goods to different markets such as China, the UAE, the Netherlands, Singapore, Hong Kong, and Australia, among others.
As per the commerce ministry’s trade data for August 2025, exports to China climbed 22.4% to $1.22 billion, while shipments to the Netherlands rose 17.9% to $1.83 billion. The UAE imported goods worth $3.35 billion from India, marking a 23.4% annual increase, and exports to Hong Kong surged 62.5% to $584.7 million.
Other notable gains came from Italy, which imported Indian goods worth $631.2 million, up 15.7%. Exports also rose to South Africa ($654.1 million, up 19.7%), Nepal ($617.3 million, up 14.4%) and Bangladesh ($874.6 million, up 16.2%).
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