(MENAFN- Live Mint)

NEW DELHI: India is looking to finalize a framework agreement on reciprocal tariffs with the US by the end of this year, said commerce secretary Rajesh Agrawal, marking a significant step toward resolving the issue that has strained bilateral trade between the two countries.

The two countries are making steady progress on a deal running parallel to the broader bilateral trade agreement negotiations, and the government is pursuing“two separate parallel tracks" with Washington, Agrawal said on Friday.

“While a comprehensive trade agreement will take longer due to its wide scope, the framework deal-aimed specifically at addressing reciprocal tariff challenges-has moved into an advanced stage," he said while speaking at an event organised by industry lobby Ficci.

Also Read | India, Canada to resume trade talks next week, says Piyush Go

US President Donald Trump initially announced a 25% reciprocal tariff on India in April, but imposed an additional 25% in August for buying Russian oil, taking the total levy on Indian goods to 50%. The tariffs have hit India's exports to the US, particularly from labour-intensive sectors such as garments, leather, gems and jewellery. Shipments to the US account for roughly 2% of India's GDP.

“We are very optimistic and hopeful that we should find a solution within this calendar year. We have engaged deeply with the US teams over the last few months and have tried to iron out most issues. It is now only a matter of time to find the right landing zone for both countries," the Commerce Secretary said at the event.

“The progress on the framework agreement will support and feed into the larger bilateral negotiations."

Export trends, tariff impact

New Delhi and Washington have been negotiating a bilateral trade agreement since it was announced on 13 February during Prime Minister Narendra Modi's visit to Washington. Both leaders had issued a joint statement at the time, committing to increase the bilateral trade to $500 billion by 2030.

Despite global trade volatility, Agrawal said India's merchandise exports touched $491 billion in the first seven months of FY26, compared to $469 billion in the same period last year.

Also Read | India, US trade deal likely soon, huge tariff cuts on the hori

He pointed to Indian exporters' ability to diversify markets after the US tariffs, citing a 60% jump in shrimp exports to the European Union (EU). He said the upcoming India–EU summit in January was expected to give further momentum to the India-EU trade negotiations. Both sides had earlier committed to concluding the talks by the end of December.

Meanwhile, India's exports to the US showed signs of recovery in October after four straight months of decline, even as broader exports remained subdued and the country's import bill ballooned due to a sharp rise in gold and silver shipments.

The commerce ministry data showed India's merchandise exports to the US at $6.3 billion in October, up 14.5% from September, the first month-on-month increase since May, despite Washington's 50% tariff on most Indian goods.

However, at $6.3 billion, this remains lower than the $6.9 billion recorded in October 2024, according to Global Trade Research Initiative (GTRI) co-founder Ajay Srivastava

Also Read | India, UAE review trade pact to clear bottlenecks, boost market acc

The punitive US tariffs have cast a shadow on India's trade growth as goods trade deficit ballooned to an all-time high in October. The trade gap widened sharply to $41.68 billion last month, up from $32.15 billion in September and $26.2 billion a year earlier, according to the commerce ministry data.

Mint reported on 22 October that India and the United States are nearing a long-stalled trade agreement that would reduce US tariffs on Indian imports to 15–16% from the steep 50%. Energy and agriculture emerged as key issues at the negotiating table, and India may agree to gradually reduce its imports of Russian oil.

MENAFN28112025007365015876ID1110411387