India and the US are committed to increasing bilateral trade to $500 billion and negotiating a “strong” trade agreement within the next 6-8 months, Commerce and Industry Minister Piyush Goyal said on Tuesday.
During the recent visit of Prime Minister Narendra Modi to Washington, India and the US announced to more than double the two-way commerce to $500 billion by 2030 and negotiate the first tranche of a mutually beneficial, multi-sector bilateral trade agreement (BTA) by fall of 2025.
Goyal said once his US counterpart takes charge, both countries will discuss the contours of the pact.
“…In the next 6-8 months, by establishing a strong trade agreement, we are committed to increasing trade to $500 billion,” Goyal told reporters here on the sidelines of CII’s India-Qatar Business Forum meet.
He added businesses of both the countries are excited about the agreement.
When asked if the pact would have chapters related to goods, services and investments, he said, “My counterpart has not yet confirmed in the US…After the (confirmation), we will do talks and then only we can decide the way forward”.
Normally in a free trade agreement, two trading partners either eliminate or significantly reduce customs duties on the maximum number of goods traded between them. Besides, they ease norms to promote trade in services and boost investments.
During the first term of US President Donald Trump, the two countries had discussed a mini-trade deal, but it was shelved by the Joe Biden administration as they were not in favour of such pacts.
In 2023, the US and India bilateral trade in goods and services stood at $190.08 billion ($123.89 billion in goods and $66.19 billion in services trade). In that year, India’s merchandise exports to the US stood at $83.77 billion, while imports were $40.12 billion, leaving a trade gap of $43.65 billion in favour of India.
The country’s services export to America was $36.33 billion in 2023, while imports were aggregated at $29.86 billion. The trade gap (difference between imports and exports) was $6.47 billion in favour of New Delhi.
During 2021-24, America was the largest trading partner of India. The US is one of the few countries with which India has a trade surplus.
In 2023-24, the US was the largest trading partner of India with $119.71 billion bilateral trade in goods ($77.51 billion worth of exports, $42.19 billion of imports and $35.31 billion trade surplus).
India received $67.8 billion in foreign direct investments from America during April 2000 and September 2024.
