• India has decided to follow the trade liberalisation path with the US, and both countries are negotiating a bilateral trade agreement for which in-person talks are expected to begin in May.

• India and the US are starting negotiations in virtual mode this week. They have also finalised and signed the terms of reference (ToRs) for the pact.

• In a trade pact, two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. They also ease norms to promote trade in services and boost investments.

• India and the US have been engaged in negotiating a bilateral trade agreement since March. Both sides have targeted to conclude the first phase of the pact by October this year, with an aim to more than double the bilateral trade to $500 billion by 2030 from about $191 billion currently.

• Commerce Secretary Sunil Barthwal said that the agreement, if finalised, will open huge opportunities for both India and US businesses.

• India is also looking at non-tariff barriers as well as tariff barriers in the agreement. If these barriers are reduced by both sides, it will lead to higher trade growth for the US and India.

• A successful trade deal could address market access issues, reduce trade barriers, and foster greater cooperation in sectors like technology, pharmaceuticals, and manufacturing. 

• From 2021-22 to 2023-24, the US was India’s largest trading partner.

• The US accounts for about 18 per cent of India’s total goods exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade.

• With America, India had a trade surplus (the difference between imports and exports) of $35.32 billion in goods in 2023-24. This was $27.7 billion in 2022-23, $32.85 billion in 2021-22, $22.73 billion in 2020-21, and $17.26 billion in 2019-20.

• In 2024, India’s main exports to the US included drug formulations and biologicals ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), readymade garments of cotton, including accessories ($2.8 billion), and products of iron and steel ($2.7 billion).

• Imports included crude oil ($4.5 billion), petroleum products ($3.6 billion), coal, coke ($3.4 billion), cut and polished diamonds ($2.6 billion), electric machinery ($1.4 billion), aircraft, spacecraft and parts ($1.3 billion), and gold ($1.3 billion).

(The author is a trainer for Civil Services aspirants.)