RClarkTaylor
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On April 22, 2025, US Vice President JD Vance declared that the US and India had formally completed the terms of reference for their bilateral trade talks, which is a major step in the direction of a comprehensive trade deal, following a meeting with Prime Minister Narendra Modi in Delhi, Vance called this agreement a “roadmap for a final deal” and stressed that it is an important step toward President Trump and Prime Minister Modi’s shared goal of deepening economic ties between the two countries.
U.S officials appreciate Prime Minister Modi because he is a "tough negotiator" who drives a hard bargain, according to Vance. He also pointed out a change in the US strategy toward India, saying that the country is "not here to preach" but rather to be a partner, departing from earlier perspectives that saw India mainly as a place to find cheap labor, the US & India relationship is becoming more strategically and economically significant, which is reflected in this more cordial and cooperative tone.
The finalized terms of reference set the framework for negotiations aimed at addressing key issues such as market access, regulatory standards, and ensuring reciprocity in trade practices, US Trade Representative Jamieson Greer confirmed that these talks seek to open new markets for American goods and tackle unfair practices that have historically harmed US workers. The goal is to create a balanced trade relationship that benefits both countries, with an emphasis on job creation, innovation, and economic growth.
Recent tariff tensions are the context for this development, earlier in April 2025, the Trump administration put a retaliatory duty on Indian goods of 26%, concerns over the widening trade gap between the United States and India, which hit $45.7 billion in 2024, prompted the levies, the approved terms of reference show progress toward settling these disagreements through discussion rather than protracted tariff escalation, which is in line with the US government aim for more equal trade arrangements.
India’s government has maintained that negotiations are ongoing and that the country’s interests remain paramount, the trade talks are part of a broader initiative known as the India& US COMPACT Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology, which aims to deepen both defense cooperation and economic engagement. The agreement is expected to facilitate increased trade in sectors such as agriculture, pharmaceuticals, technology, and defense equipment, with India also seeking access to advanced U.S. technologies critical for its development goals.
The U.S side is also keen on encouraging India to reduce non-tariff barriers that limit American exporters’ access to the Indian market. Vice President Vance mentioned the importance of India considering reforms in areas like nuclear liability laws, which could enable greater U.S participation in India’s nuclear energy sector, energy cooperation including exploration of offshore gas reserves and critical mineral supplies, is another key area of mutual interest highlighted during the visit.
Although a firm deadline for the trade agreement's completion has not been established, both governments have expressed urgency and a commitment to completing the pact this year, the established roadmap sets the stage for frequent online and face-to-face talks, and delegation-level visits are anticipated to keep the momentum going, the pact is expected to set the standard for any future trade agreements India enters into with other developed nations.
In the face of persistent global economic uncertainty, the Indian rupee has experienced considerable volatility versus the US dollar, but market reactions have been cautiously positive, but the business groups on both sides have embraced the news of finalized conditions, seeing the agreement as a springboard for more investment and commerce between the two countries.
U.S officials appreciate Prime Minister Modi because he is a "tough negotiator" who drives a hard bargain, according to Vance. He also pointed out a change in the US strategy toward India, saying that the country is "not here to preach" but rather to be a partner, departing from earlier perspectives that saw India mainly as a place to find cheap labor, the US & India relationship is becoming more strategically and economically significant, which is reflected in this more cordial and cooperative tone.
The finalized terms of reference set the framework for negotiations aimed at addressing key issues such as market access, regulatory standards, and ensuring reciprocity in trade practices, US Trade Representative Jamieson Greer confirmed that these talks seek to open new markets for American goods and tackle unfair practices that have historically harmed US workers. The goal is to create a balanced trade relationship that benefits both countries, with an emphasis on job creation, innovation, and economic growth.
Recent tariff tensions are the context for this development, earlier in April 2025, the Trump administration put a retaliatory duty on Indian goods of 26%, concerns over the widening trade gap between the United States and India, which hit $45.7 billion in 2024, prompted the levies, the approved terms of reference show progress toward settling these disagreements through discussion rather than protracted tariff escalation, which is in line with the US government aim for more equal trade arrangements.
India’s government has maintained that negotiations are ongoing and that the country’s interests remain paramount, the trade talks are part of a broader initiative known as the India& US COMPACT Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology, which aims to deepen both defense cooperation and economic engagement. The agreement is expected to facilitate increased trade in sectors such as agriculture, pharmaceuticals, technology, and defense equipment, with India also seeking access to advanced U.S. technologies critical for its development goals.
The U.S side is also keen on encouraging India to reduce non-tariff barriers that limit American exporters’ access to the Indian market. Vice President Vance mentioned the importance of India considering reforms in areas like nuclear liability laws, which could enable greater U.S participation in India’s nuclear energy sector, energy cooperation including exploration of offshore gas reserves and critical mineral supplies, is another key area of mutual interest highlighted during the visit.
Although a firm deadline for the trade agreement's completion has not been established, both governments have expressed urgency and a commitment to completing the pact this year, the established roadmap sets the stage for frequent online and face-to-face talks, and delegation-level visits are anticipated to keep the momentum going, the pact is expected to set the standard for any future trade agreements India enters into with other developed nations.
In the face of persistent global economic uncertainty, the Indian rupee has experienced considerable volatility versus the US dollar, but market reactions have been cautiously positive, but the business groups on both sides have embraced the news of finalized conditions, seeing the agreement as a springboard for more investment and commerce between the two countries.
