New Delhi: India and the United States have signed the terms of reference for the first part of the bilateral trade deal.
This is a big development in terms of India-US relations amid the ongoing trade war between China and the US and the tariffs being levied by Donald Trump across the globe.
India and the United States agreed in February to work on the first phase of a trade deal to be concluded later this year, with a view to reaching bilateral trade worth $500 billion by 2030, reports Dynamite News correspondent.
This is the first phase of the trade deal—India and the U.S. are signing the terms.
What is the significance?
This deal has been in the works for the last few months, and the negotiations have been very important. We know that Commerce Minister Piyush Goyal was in the United States in February.
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On April 2nd, the announcement of reciprocal tariffs caused a pause on those tariffs specifically for India until July 9th. There are three countries in particular with which the Trump administration wants to seal deals as soon as possible.
The first official confirmation came from South Korean President Moon Jae-in, who said that the Trump administration in Washington is keen on sealing deals with South Korea, Japan, and India.
This deal must be finalized by the Trump administration within 90 days.
Now, the US and India have signed a term of reference agreement. Both countries completed it last week, but formally signed it today.
This marks progress toward the first stage of the bilateral agreement, which is expected to be reached by July.
The full agreement is likely to be finalized later in the fall—around September or October—when President Trump is expected to visit India for the Quad Leaders’ Summit, set to be held in New Delhi this year.
That is when both countries can sign the comprehensive bilateral trade agreement.
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But before that, by July 9th—when the pause on reciprocal tariffs expires—a preliminary deal will be signed.
The United States is extremely keen on signing agreements with these three nations (South Korea, Japan, and India) because not doing so and proceeding with reciprocal tariffs could have adverse effects on the U.S. economy.
That’s why, at a rapid pace, the Trump administration is negotiating with India. With the terms of reference now signed, we can expect significant progress.
Just last month, the U.S. Trade Representative was in New Delhi, and this is the biggest development since then—two weeks later, the terms of reference have been signed.
