New Delhi: The reciprocal tariffs imposed by the United States on India earlier this year are a “key area” likely to be addressed in the first package of the bilateral trade deal under negotiation between the two countries. Currently, negotiations are near the end, with India waiting for the US to respond to its new trade proposal.
“Reciprocal tariffs are a key area likely to be addressed in the first tranche of the trade deal with the US. Both tariffs on trade and oil will likely be addressed in the first tranche of the bilateral trade agreement. I cannot put a deadline on the deal, but we are close to the last negotiations,” a commerce ministry official said Monday.
India and the US launched negotiations for a bilateral trade agreement (BTA) in March 2025. This was weeks before American President Donald Trump announced his policy of imposing “reciprocal tariffs” on nearly every major economy.
India was slapped with 25 percent tariffs on its exports, later increased to 50 percent, after Trump decided to penalise India for its energy trade with Russia.
Six rounds of negotiations have been held so far. The last meeting between the negotiating teams was held 15-17 October in Washington, DC.
Last week, ThePrint reported that New Delhi is awaiting a response from Washington, DC, over its latest proposals for the first tranche of the deal. There is no plan for another round of negotiations any time soon.
The first tranche of the deal focuses on resolving the issue of reciprocal tariffs. There are also questions on market access to be resolved before the two nations negotiate other packages.
However, despite reciprocal tariffs, merchandise trade between India and the US remains strong. Data published by the Ministry of Commerce and Industry Monday indicates that from April to October, Indian merchandise exports to the US have grown by 10.15 percent compared to 2024.
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Exports to the US
India exported $52.12 billion worth of goods to the US in the first seven months of this year. In the same period in 2024, total exports stood at $47.32 billion.
Also, India’s April-June exports to the US saw a marked uptick. India consistently exported nearly $8 billion worth of goods or more to the US across these months.
This was followed by a dip to $6.86 billion worth of exports to the US in August and a further $5.47 billion in September. October then registered an uptick in Indian exports to the US, increasing to $6.31 billion. The main exports driving Indian exports to the US in the first seven months of this year were electronic goods, engineering goods, drugs and pharmaceuticals, chemicals, and textiles.
Trump’s tariffs have certain carve-outs, specifically for electronic goods, drugs, and pharmaceuticals. Other goods, including textiles, fall under Trump’s reciprocal tariffs, which make a significant portion of India’s total exports to the American market.
So far, the US remains India’s top export destination in the 2025-2026 financial year. The next largest export destination for Indian goods is the United Arab Emirates. In the first seven months of this financial year, $22.14 billion worth of goods were exported to the United Arab Emirates—nearly $2 billion higher than in the same period last year.
Netherlands, China, and the UK round out the top five export destinations for Indian firms this financial year. Indian exports to the Netherlands slightly fell, by $3 billion or more, between April and October 2025, compared to 2024 exports. Indian merchandise exports to the Netherlands were $11.90 billion in this period, and $15.13 billion in the same period in 2024.
However, India’s exports to China have grown in the first seven months of this year. It grew to touch $10.03 billion between April and October 2025. Last year, during the same period, Indian merchandise exports to China stood at roughly $8.04 billion.
President Trump recently moved 254 agricultural and processed foods imported to the US to Annexe II of his reciprocal tariffs executive order. This, in effect, removed the additional duties on these goods effective from 13 November. This covers nearly a billion-dollar worth of Indian exports to the US.
Specific products in sectors, such as fruits and nuts, processed foods, spices (except thyme), tea and coffee, essential oils, vegetables and edible roots, beef products, and fertilisers have all seen the additional duties removed.
The US, for example, imported roughly $491.31 million worth of processed foods from India across the 50 products Trump has removed from additional duties.
(Edited by Madhurita Goswami)