New Delhi: India and the US plan to negotiate a mutually beneficial multi-sector Bilateral Trade Agreement (BTA) aimed at increasing market access, reducing tariff and non-tariff barriers, and enhancing supply chain integration, minister of state for commerce Jitin Prasada told the Lok Sabha on Tuesday.
The initiative is part of efforts to strengthen economic ties amid concerns over potential US reciprocal tariffs that could impact Indian exports.
In response to a question by All India Trinamool Congress member Sayani Ghosh regarding the impact of reciprocal tariffs, Prasada informed the Lok Sabha that no new tariffs have been imposed on Indian exports as of now.
Amid the ongoing tariff war with the US, India is closely watching potential disruptions to its exports, particularly in key sectors such as pharmaceuticals, electronic goods, engineering products, gems and jewellery, and textiles.
The US remains India’s largest export destination, accounting for 17.74% of the country’s total outbound shipments in 2023-24. Total exports to the US stood at $77.52 billion.
Data from the commerce ministry shows that engineering goods topped India’s exports to the US last year at $17.6 billion, making up 16.12% of India’s total exports in that category.
Electronic goods followed at $10 billion, contributing 34.5% of the sector’s overall shipments. The pharmaceutical industry, which has long enjoyed strong access to the US market, exported goods worth $8.7 billion, accounting for 31.35% of India’s total pharma exports. Gems and jewellery, another major sector, saw exports of nearly $9.9 billion, forming 30.29% of India’s total shipments in this category.
Textiles and apparel exports to the US were valued at $4.7 billion, accounting for 32.47% of total exports in this category. India also exported marine products worth $2.49 billion, making up 33.9% of its total exports in the sector. Handicrafts, excluding carpets, contributed $711.96 million, holding a 39.5% share in India’s global exports of such items.
The plastic and linoleum sector saw exports worth $1.67 billion, while organic and inorganic chemical shipments reached $3.89 billion, contributing 13.26% of total chemical exports. The cotton textiles segment had exports worth $2.98 billion, accounting for 25.51% of total exports in this category.
While sectors such as cashews, tea, rice, and cereals have a relatively smaller share of exports to the US, they still represent crucial areas for trade diversification. The cereal preparations and processed food sector contributed $442.72 million, while spice exports stood at $572.46 million, making up 13.47% of India’s total spice shipments.
However, the minister reiterated that India remains engaged with Washington to ensure continued market access and a fair trade environment. As part of efforts to strengthen economic ties, both countries have committed to expanding their trade relationship under the ambitious “Mission 500,” aiming to double bilateral trade to $500 billion by 2030, the minister informed the Lok Sabha.
The US issued a Memorandum on Reciprocal Trade and Tariffs on 13 February directing its Commerce Department and the United States Trade Representative (USTR) to investigate harm caused by non-reciprocal trade practices. The review will assess trade arrangements with various partners and propose corrective measures, which could include tariff hikes under existing US trade laws.
Despite the uncertainty surrounding US trade policies, India is actively working on diversifying its export destinations to mitigate risks. While the US remains an irreplaceable market for several sectors, Indian exporters are seeking new opportunities in Europe, West Asia, and emerging economies in Africa and Latin America. This aligns with policies aimed at expanding trade partnerships, free trade agreements (FTAs) with new regions, and boosting exports under initiatives like “Make in India” and Production-Linked Incentive (PLI) schemes.
For instance, India has signed or is negotiating FTAs with the UK, the EU, and Gulf nations, and has been expanding trade relations with Africa through increased exports of pharmaceuticals, automobiles, and machinery. Additionally, Latin America has emerged as an important market for Indian engineering goods, automobiles, and chemicals.
As global trade dynamics shift, India’s strategy remains twofold—expanding opportunities with the US while ensuring its key industries are protected from sudden disruptions.
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