The United States and India have announced “significant progress” towards a bilateral trade agreement following talks between US Vice President JD Vance and Indian Prime Minister Narendra Modi, Bloomberg reports.
The development marks a crucial step in laying down a roadmap for further negotiations, with New Delhi hoping to secure protection from potential US tariff hikes.
During Vance’s four-day visit to India, the White House released a statement confirming the two sides have finalized the terms of reference for negotiations on “a new and modern trade agreement.” This high-profile trip underscores India’s increasing importance as a key partner for the US in international trade.
Without a trade agreement in place, India faces tariffs of up to 26% on its exports to the US, as a result of President Donald Trump’s April 2 levies, which are currently under a 90-day pause. Trump has repeatedly criticized India for its tariffs, deeming them too high.
The US Trade Representative released a separate fact sheet outlining Washington’s goals for the trade discussions, including increasing market access for US goods, reducing India’s tariff and non-tariff barriers, and securing other important commitments.
Vance’s visit included a meeting with Modi at the Prime Minister’s residence in Delhi, followed by a larger meeting with staff and a dinner with the Vice President’s wife, Usha Vance, and their children. Prior to arriving in India, Vance spent three days in Italy. He is scheduled to give a speech in Jaipur on Tuesday, focusing on the shared economic priorities of the United States and India.
During Modi’s visit to the White House in February, both nations announced their intention to finalize the first tranche of a bilateral trade agreement by the fall. Following his meeting with Vance, Modi expressed his anticipation for a visit from Trump to India later this year.
“An early start on the bilateral trade pact and being a strategic ally to the US are both a positive for India,” stated Sonal Varma, an economist at Nomura Holdings Inc. “The pace of the talks show that for the initial tranche, the fall deadline is achievable, even though the whole deal will take much longer.”
Separately, Indian Finance Minister Nirmala Sitharaman affirmed India’s commitment to the process, stating that India was among the first countries to approach the Trump administration and initiate trade negotiations.
“India’s biggest and top-most trading partner is the United States of America and that importance is not lost in today’s government in India,” she emphasized during a speech at the Hoover Institution at Stanford University.
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