India–US Trade Breakthrough Nears: First Phase Of Bilateral Agreement Set To Ease Tariffs After Months Of High-Stakes Negotiations

New Delhi, Nov 19: When United States President Donald Trump imposed a 25 per cent “reciprocal tariff” on India, many thought New Delhi would bend over backwards; and when he added another 25 per cent as punitive measure against buying Russian oil, they thought cargo ships from Moscow will be stopped immediately.

Instead, New Delhi pursued measured negotiations, keeping dialogue channels open while sending strong signals on India’s readiness to defend its economic interests.

Positive Signals From Washington as Trade Talks Advance

President Trump has lately been sending positive signals about strengthening ties with India. And now, India and the United States are on the verge of finalising the first phase of a bilateral trade agreement (BTA), which is expected to resolve tariff disputes and expand market access.

First Tranche of BTA ‘Nearing Closure’

Bilateral talks between India and the US have reached an advanced stage, with officials confirming that the first tranche of the BTA is “nearing closure”. This phase primarily addresses the 50 per cent tariffs imposed by the US on Indian goods.

India Seeks Fair, Balanced Deal Protecting Domestic Sectors

Meanwhile, India’s Commerce Minister Piyush Goyal emphasised that any agreement must be fair, equitable, and balanced, protecting sensitive domestic sectors such as farmers and fishermen.

Two-Part Discussions on Tariffs and Market Access

The talks can be divided into two parts; one focussing on reciprocal tariffs, and another on broader market access and regulatory issues.

Phase One Expected to Ease Tariff Burden

The tariff package is expected to be finalised sooner, while the second part may take some time. The first phase of the BTA may see some easing in the 50 per cent tariff burden, making Indian exports more competitive.

Export Sectors Stand to Benefit

Sectors like pharmaceuticals, textiles, and engineering goods, already driving over $50 billion in exports to the US in 2025, stand to gain further. For India, the deal could bring significant benefits in terms of reduced trade barriers, stronger export opportunities, and deeper strategic alignment with Washington.

India Turns Tariff Tensions Into Constructive Diplomacy

Thus, government of India’s political will, resilience and some deft political manoeuvring ensured that the Indo-US trade talks, once mired in tariff disputes and geopolitical frictions, move toward a balanced and positive outcome.

Broader Strategic Context Strengthens India’s Position

New Delhi thus managed to turn a potentially adversarial situation into a constructive partnership. The government ensured officials emphasise the broader Indo-US partnership, including defence, technology, energy, among others, to ensure that trade talks were framed not merely as transactional but as part of a strategic alignment.

Safeguards for Farmers and Small Producers Prioritised

It has repeatedly stressed that any deal must be fair, equitable, and balanced, with safeguards for farmers, fishermen, and small manufacturers. This resilience reassured domestic constituencies while strengthening India’s bargaining position.

Meanwhile, despite US concerns over India’s Russian oil imports, New Delhi maintained its energy security priorities while continuing trade talks.

India Shows Ability to Withstand External Pressure

This demonstrated India’s ability to withstand external pressure without derailing negotiations. Six rounds of negotiations have already been completed, reflecting India’s determination to push through complexities and keep momentum alive.

First Tranche Expected by Late 2025

There are clear signals emanating now that the first tranche of the agreement will be completed by late 2025, perhaps this month, showing top-level political will on both sides to overcome obstacles.

Domestic Backing Boosts India’s Negotiating Strength

India’s political leadership framed the trade deal as a national interest issue, ensuring cross-sectoral support and minimising domestic opposition.

India Emerges as Key Voice in Global Trade Diplomacy

India’s ability to negotiate firmly yet constructively enhances its credibility in global trade diplomacy, positioning it as a serious player in supply chain diversification.

‘Resilience Made in India’ as Negotiations Pay Off

As SBI Capital Markets had titled its report 'Tariffs are Made in the USA, but Resilience is Made in India', describing Washington’s aggressive tariff regime as a “key flashpoint” designed to pressure India’s external sector.

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Proposed Deal Strengthens Indo-US Strategic Framework

However, India’s stand has finally paid off with the proposed deal reinforcing Indo-US ties beyond trade, embedding economic cooperation within a larger strategic framework.

(Disclaimer: Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)