India and US Aim to Strengthen Trade Ties, Targeting $500 Billion Deal Within 6-8 Months: Goyal

India and the United States are preparing for a significant trade collaboration in the coming months, as indicated by Commerce and Industry Minister Piyush Goyal. The two countries are working toward expanding their bilateral trade and establishing a strong trade agreement to enhance economic cooperation.

Ambitious Trade Target of $500 Billion

According to a report by PTI on February 18, Minister Goyal revealed that India and the US are committed to increasing their bilateral trade to $500 billion. Both nations aim to finalize a comprehensive trade agreement within the next 6-8 months, paving the way for deeper economic ties.

During Prime Minister Narendra Modi’s recent visit to Washington, India and the US set an ambitious goal of more than doubling their bilateral trade by 2030. As part of this strategy, they agreed to initiate negotiations on the first phase of a multi-sector bilateral trade agreement (BTA) by the fall of 2025.

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Key Discussions and Agreement Scope

Goyal highlighted that discussions regarding the trade pact will commence once his US counterpart assumes office. He also noted that businesses from both nations are eagerly looking forward to the upcoming agreement, which is expected to cover multiple sectors.

When asked whether the trade agreement would encompass goods, services, and investments, Goyal responded, “My counterpart in the US has not yet confirmed... Once we receive confirmation, we will engage in discussions to determine the course of action.”

Typically, free trade agreements (FTAs) involve the elimination or significant reduction of customs duties on the majority of goods exchanged. They also simplify regulations to encourage the trade of services and facilitate investment flows between countries.

Past Trade Deals and Challenges

During Donald Trump’s presidency, India and the US explored a mini-trade deal, but the Biden administration decided against it, favoring a different approach. Despite this, trade relations between the two countries have remained strong.

In 2023, the total bilateral trade in goods and services between India and the US stood at $190.08 billion. This included $123.89 billion in goods trade and $66.19 billion in services trade.

India’s merchandise exports to the US reached $83.77 billion, while imports amounted to $40.12 billion, creating a trade surplus of $43.65 billion for India. In services, India exported $36.33 billion to the US and imported $29.86 billion, leading to a $6.47 billion surplus.

US-India Trade Relations and Future Prospects

From 2021 to 2024, the United States has been India’s largest trading partner. It is also among the few countries with which India enjoys a trade surplus. In the 2023-24 period, bilateral trade in goods reached $119.71 billion, with $77.51 billion in exports from India and $42.19 billion in imports from the US, resulting in a trade surplus of $35.31 billion.

Furthermore, India attracted $67.8 billion in foreign direct investment (FDI) from the US between April 2000 and September 2024. This inflow of investments has contributed significantly to India’s economic growth, particularly in sectors such as technology, manufacturing, and services.

As both nations gear up for formal trade negotiations, the upcoming agreement is expected to unlock new opportunities, streamline trade regulations, and foster stronger economic ties. If successful, the trade pact could serve as a model for future agreements between India and other global economic powers.