India and the US have reached the terms of reference outlining the roadmap for negotiations of the proposed Bilateral Trade Agreement (BTA), announced US Trade Representative Jamieson Greer on Tuesday. The statement came after US Vice President JD Vance met Prime Minister Narendra Modi in New Delhi.

       Greer said the ongoing negotiations aim to promote "balance and reciprocity" by expanding access to new markets for American products and tackling "unfair practices" that disadvantage US workers.

       “India's constructive engagement so far has been welcomed, and I look forward to creating new opportunities for workers, farmers, and entrepreneurs in both countries," he said.

       "I am pleased to confirm that USTR and India's Ministry of Commerce and Industry have finalised the Terms of Reference to lay down a roadmap for the negotiations on reciprocal trade," Greer said.

       However, he claimed that there is a "serious lack of reciprocity" in the trade relationship with India.

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       Significant progress towards BTA

       Following PM Modi and Vance's meeting on Monday, the US issued a statement, saying they have made "significant progress" in working out a trade deal that will benefit both countries.

       Union Finance Minister Nirmala Sitharaman, who is in the US, also said that both sides aim to complete the first phase of the trade deal by September or October this year.

       US' concerns with India

       However, the US has said there are still many trade barriers with India. According to a USTR report, the US had a trade deficit of $45.7 billion in goods with India in 2024, which is 5.1 per cent (or $ 2.2 billion) more than in 2023.

       “The US welcomed the tariff reductions India implemented during the Prime Minister's (Narendra Modi) meeting with President (Donald) Trump in February and its willingness to further reduce tariffs on US products as part of the BTA," the statement said.

       According to the USTR, the Trump administration wants to increase access to Indian markets, lower tariffs and non-tariff barriers, and create strong new rules that will ensure long-term benefits.

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       India-US trade: An overview

       The USTR report states that in 2024, the total trade in goods between India and the US was estimated at $129.2 billion. India’s average tariff (tax on imports) is 17 per cent, which is one of the highest among major economies. In comparison, the US average tariff is 3.3 per cent.

       When it comes to farm products, India charges an average tariff of 39 per cent, while the US charges only 5 per cent, the report states.

       "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 US exports to India," the report added.

       Trump tariffs

       On April 2, US President Trump placed a 10 per cent baseline tariff on all countries and set higher tariffs for countries with which the US has big trade deficits. Trump claimed that this was done to "level the playing field".

       "The ToR (Terms of Reference) 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," the statement said.

       The Terms of Reference include topics such as tariffs, non-tariff barriers, rules of origin, and easing customs processes.

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