Despite recent trade tensions and tariff disagreements, India is actively pushing forward with negotiations for a bilateral trade agreement with the United States. These efforts underscore India's commitment to fostering a stronger economic partnership with the U.S., even amidst a challenging global trade landscape.

The move comes in response to concerns raised after President Trump's recent comments and tariff actions against India. Trump has often described India as a "tariff king" and has implemented tariff hikes on certain Indian exports like steel and aluminum, leading to unease in New Delhi. Most recently, Trump announced increased tariffs on steel and aluminum, effective June 4th, raising concerns for Indian exporters, particularly those dealing in value-added steel and automotive components.

India's approach is centered on constructive engagement and dialogue, aiming to reach a mutually beneficial agreement that addresses the concerns of both nations. External Affairs Minister S. Jaishankar emphasized India's commitment to working with the Trump administration to finalize a trade deal by the fall of this year.

India's strategy involves active negotiation and a willingness to make concessions to maintain momentum in trade relations. Prime Minister Narendra Modi's government has reportedly shown openness to lowering tariffs on specific U.S. products, such as bourbon and motorcycles, to facilitate progress. India is also seeking a full rollback of the April 2nd tariff hikes imposed by the U.S.

Commerce Minister Piyush Goyal has also reiterated the commitment from both countries to give preferential market access to each other's businesses, with teams from both nations actively collaborating on the proposed bilateral trade agreement. Goyal also visited Washington to accelerate trade negotiations.

The United States has been India's top trading partner for the past four years, with bilateral trade reaching $131.84 billion in 2024-25. The U.S. accounts for a significant portion of India's overall trade, including 18% of its goods exports, 6.22% of imports, and 10.73% of its merchandise trade. Both countries aim to increase bilateral trade to $500 billion by 2030.

Negotiations are expected to continue, with the next round of talks scheduled for early June in New Delhi. India is seeking to finalize an interim trade agreement by the end of June to avoid additional tariffs on its exports.

Despite the challenges posed by tariff disputes and trade imbalances, India sees significant opportunities in strengthening its trade relationship with the U.S. The Finance Ministry has stated that a trade deal with the U.S. could help transform "headwinds into tailwinds" for India's outbound trade. India is also hoping the agreement will help boost its struggling goods exports. Both sides recognize the potential for a defining partnership in the trade arena, with complementary strengths that can drive mutual growth.

India has also formally notified the World Trade Organization (WTO) of its right to impose retaliatory tariffs on U.S. products in response to the steel tariffs, while prioritizing dialogue and negotiation to resolve trade disputes.