Potential Bilateral Trade Agreement (BTA) with the US

India is working on the Terms of Reference (ToR) for a potential BTA with the United States. The goal is to conclude the first tranche of negotiations by the fall of this year, establishing the purpose and structure of the negotiations.

Purpose and Expectations

• The Indian Commerce and Industry Ministry has solicited wish lists from various industries and tariff concessions expected from the US.
• The focus is on increasing exports from both nations.
• US President Donald Trump claimed that India will reduce tariffs on American imports, addressing the high trade barriers previously imposed by New Delhi.

Key Issues and Industry Inputs

• The ministry seeks details on products where Indian industry wants market access in the US and potential duty reductions.
• Indian industry has expressed interest in lower duties for American pecan nuts, cranberries, and blueberries.

Textiles Sector and Tariff Agreements

• The Confederation of Indian Textile Industry (CITI) advocates for a 'zero-for-zero' tariff agreement with the US.
• A zero-duty structure would provide a level playing field for Indian exporters, particularly against Vietnam, which benefits from duty concessions.
• With reduced tariffs, India's textile and apparel exports to the US could potentially surge to $16 billion within three years.
• The US currently imposes import duties ranging from 2.5-7.4% on Indian apparel, while India's duties vary from 5% to 12%.
• India relies on cotton imports from the US, and a duty-free access mechanism with quota safeguards could facilitate balanced trade.