India, US Set Terms for Reciprocal Trade Talks Following Modi-Vance Meeting

India and the US have finalised the Terms of Reference to lay down a roadmap for the negotiations on reciprocal trade, announced the United States Trade Representative (USTR) on Tuesday. This followed US Vice President JD Vance's meeting with Prime Minister Narendra Modi in New Delhi on Monday.

“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,” said USTR official Jamieson Greer.

"There is a serious lack of reciprocity in the trade relationship with India. These ongoing talks will help achieve balance and reciprocity by opening new markets for American goods and addressing unfair practices that harm American workers," he added, welcoming India's constructive engagement so far. He reiterated that it will create new opportunities for workers, farmers and entrepreneurs in both countries.

USTR in its statement also mentioned that this development not only reaffirms the importance of the India-US COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) initiative but also highlights the progress in the negotiations for a Bilateral Trade Agreement (BTA), launched by President Donald Trump and Modi in Washington on February 13, 2025.

US' Trade Concerns

The US has flagged its trade barriers with India multiple times. According to the USTR data, the US ran a $45.7bn goods trade deficit with India in 2024, a $2.2bn increase over 2023. It said that total goods trade with India was an estimated $129.2bn 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%," the President's executive office noted.

Comparing both countries' average applied tariff rate on agricultural products, USTR highlighted that India’s average tariff rate stands at 39% while the US' is at 5%.