India close to finalising comprehensive bilateral trade deal with US

IANS April 21, 2025 366 views

India is on the verge of a groundbreaking bilateral trade agreement with the United States that could dramatically reshape economic relations. The proposed deal aims to facilitate zero-duty imports and boost bilateral trade to $500 billion by 2030. With a young population and strong macro fundamentals, India presents an attractive alternative in global supply chains. The agreement could significantly enhance technology transfer and manufacturing collaboration between the two nations.

"India's 26 per cent reciprocal tariff is moderate in comparison" - ACMIIL Report
India close to finalising comprehensive bilateral trade deal with US
Mumbai, April 21: India is close to finalising a comprehensive Bilateral Trade Agreement (BTA) with the US, which is expected to facilitate zero-duty imports under the production-linked incentive (PLI) schemes and enhance bilateral trade, targeted to reach $500 billion by 2030, according to a report released on Monday.

Key Points

1

India poised for major trade breakthrough with US

2

Demographic dividend driving economic potential

3

Supply chain diversification creates strategic opportunities

4

Tech and manufacturing imports to expand significantly

As United States Vice President J.D. Vance, accompanied by his family, arrived in India, the report further mentioned that the BTA also opens pathways for high-end US tech imports in defence, clean energy and advanced manufacturing.

Despite the global upheaval, India's consumption-driven economy, demographic dividend, and relatively low export dependency position it favourably, said the report by Asit C. Mehta Investment Interrmediates Ltd (ACMIIL), a Pantomath Group company.

With merchandise exports to the US accounting for only 2.1 per cent of India's GDP, the country is less vulnerable to external shocks compared to other export-heavy economies.

The report underscores India's potential to benefit from supply chain diversification, especially as the US imposes steep tariffs on Chinese imports.

"India's 26 per cent reciprocal tariff is moderate in comparison, improving its appeal as a manufacturing and trading partner," the report mentioned.

India's economic resilience is underscored by strong macro fundamentals, with a projected GDP growth of 6.5 per cent for FY26 and a commitment to fiscal prudence as the fiscal deficit is expected to reduce to 4.9 per cent in FY25.

The Reserve Bank of India has shifted towards a more accommodative monetary stance, with anticipated repo rate cuts expected to stimulate private investment.

According to the report, a key structural advantage lies in India's demographics -- 51 per cent of the population is under 40, driving consumption, with Gen Z and millennials emerging as the primary spenders.

On the market front, technical and valuation indicators point toward a bottoming out, creating conditions conducive for medium- to long-term equity outperformance.

The government's policy support, including the 'Make in India' initiative and a focus on ease of doing business, continues to strengthen various sectors, the report noted.

Reader Comments

R
Rahul K.
This is huge for Indian manufacturing! The zero-duty imports under PLI will be a game changer. Excited to see how this boosts local production while keeping costs competitive. 🇮🇳
P
Priya M.
While I appreciate the economic benefits, I hope there are safeguards for small businesses that might struggle to compete with US imports. The deal should benefit all sectors, not just big corporations.
A
Amit S.
$500 billion target by 2030? That's ambitious but achievable with our demographic advantage. The youth population will definitely drive consumption growth. Great analysis in this article!
N
Neha P.
The clean energy tech imports could be transformative for our renewable sector. Hope this accelerates India's green transition while creating jobs. Fingers crossed! 🤞
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Sanjay R.
Interesting that our export dependency is only 2.1% of GDP. Makes me feel more secure about India's economic stability compared to other nations during global uncertainties.
T
Tina D.
The article mentions defense tech imports - I wonder if this means we'll see more joint ventures between Indian and US defense companies? Could be great for indigenous R&D too.

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Tags:
India-US Trade Deal Bilateral Agreement Economic Partnership J.D. Vance Visit Trade Expansion Manufacturing