Athira Sethu
Kochi, 14 May 2025
India and the United States are gearing up for a crucial round of trade negotiations set to be held between May 17 and 20. India’s Commerce and Industry Minister Piyush Goyal will visit the United States to hold talks with American trade officials regarding the possibility of a trade pact between the two nations. The meeting is at a time when US President Donald Trump is set to make an announcement of a new trade agreement upon his return from a visit to the Middle East.
One of the key reasons for the trade negotiations is the issue of tariffs. The United States had previously imposed additional import tariffs on Indian steel and aluminium. India, in turn, proposed to the World Trade Organization that it could impose similar tariffs on American products. Currently, both nations are employing a 90-day pause period to prevent further tariff increases. The pause allows them time to negotiate and potentially agree on a short-term agreement before a complete trade agreement is announced in October.
Throughout the negotiations, India will request the United States to lower tariffs on a number of Indian commodities. Among them are textiles, leather products, gems and jewels, shrimp, bananas, grapes, plastics, and chemicals. Meanwhile, the US is seeking that India reduce import duties on some of its goods, such as automobiles, electric cars, dairy products, wines, petrochemical products, apples, and tree nuts. The two nations are looking for a middle path that will favor businesses and enhance trade.
There is even a political slant to the trade negotiations. Not long ago, President Trump announced that he advised India and Pakistan to refrain from their squabbles or the US will put an end to trade with them. The government of India resolutely disaffirmed that proclamation and confirmed that trade wasn’t mentioned anywhere after talks that were held in connection with India’s military attack termed Operation Sindoor.
In spite of all these tensions, India-US trade relations have been robust. America has been India’s largest trading partner since the past four years. Trade between the two nations stood at $131.84 billion during the financial year 2024–25. India enjoys a trade surplus with America as it exports more to America than imports.
Both nations now hope the discussions will assist in lessening trade barriers, eliminating some of the additional taxes, and enhancing business for both countries.
