The trade relationship between India and the United States is currently navigating a complex landscape of opportunities and challenges, marked by ongoing negotiations for a bilateral trade agreement amidst concerns over tariff hikes.

Both nations have expressed a strong desire to provide preferential market access to each other's businesses, with active collaboration underway to finalize a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA). Announced in February 2025 by Prime Minister Narendra Modi and President Donald Trump, the BTA aims to significantly expand trade and investment ties, targeting a more than doubling of bilateral trade from the current $191 billion to $500 billion by 2030. The first phase of the agreement is expected to be finalized by September-October 2025.

Despite the commitment to enhanced trade relations, recent tariff actions by the US have raised concerns in India. Specifically, President Trump's announcement of doubling import duties on steel and aluminum, effective June 4, 2025, has sparked worries about the potential impact on Indian exports, particularly value-added steel products and auto components. In response, India has submitted an official notification to the World Trade Organization (WTO), maintaining its right to implement countervailing duties on US products.

Commerce Minister Piyush Goyal has emphasized continued dialogue between the two nations to resolve these issues bilaterally. "Let us wait and watch… both the US and India share good relations, and we will continue to work together to resolve all these issues bilaterally," Goyal stated.

Negotiations for an interim trade agreement are also underway, with the goal of concluding the deal by late June to avoid new US tariffs on Indian exports. India is seeking a full rollback of the April 2 tariffs. A US trade delegation is expected to visit New Delhi this week to advance discussions.

Despite the trade tensions, the United States remains India's largest trading partner for the fourth consecutive year, with bilateral trade reaching $131.84 billion in FY 2024-25. The US accounts for approximately 18% of India's total goods exports, 6.22% of imports, and 10.73% of overall merchandise trade.

India is banking on a key clause in the executive order signed by President Trump, which offers respite to nations who take "significant steps to remedy non-reciprocal trade arrangements". The Indian government has already taken steps to ease trade tensions, including reducing import duties on certain US products like bourbon whiskey and Harley-Davidson motorcycles.

Looking ahead, the future of US-India trade relations hinges on sustained engagement, transparent policies, and a shared vision for mutual growth. Potential areas for further collaboration include a comprehensive economic agreement, a digital trade agreement, joint innovation funds, and educational partnerships. By addressing existing challenges and nurturing the vast opportunities, US-India trade has the potential to become a model for global partnerships.