US-India Trade Deal on the Brink: Nations Aim to Sign Historic Pact by End of 2025
In a significant development for global trade, India and the United States are in the final stages of negotiating a landmark trade deal, with officials expressing strong optimism that the first phase of the agreement will be signed before the end of 2025.
After months of intense negotiations, the talks have reached an advanced stage, with the majority of contentious issues reportedly resolved. The commerce secretaries from both nations are leading the charge, aiming to conclude a “framework trade deal” that would serve as an immediate down payment on a more comprehensive Bilateral Trade Agreement (BTA) to be developed in the future.
Urgent Need for Resolution as US Tariffs Bite
The push for a deal is driven by a pressing need to address a sharp decline in Indian exports to the US, precipitated by aggressive tariff hikes from Washington. Official data reveals a stark picture: Indian exports to the United States plummeted by 28.5% between May and October 2025, falling from $8.83 billion to $6.31 billion.
This decline is largely attributed to the US imposing tariffs of up to 50% on certain Indian goods. A significant portion of these tariffs—25%—was linked to India’s continued purchases of Russian oil. The labor-intensive sectors of the Indian economy have borne the brunt of this trade friction, with exports of gems and jewellery, textiles, garments, and seafood sinking by 31.2%.
Key Demands on the Table
The negotiations have centered on reciprocal market access and the removal of trade barriers.
From the Indian side, securing duty concessions for its critical, job-creating sectors is the top priority. New Delhi is pushing for the US to lower tariffs on exports of textiles, gems and jewellery, leather goods, chemicals, and seafood. The removal of the recent reciprocal tariffs is also a key demand to revive its floundering exports.
Conversely, the United States is seeking greater access to the Indian market. American negotiators are focused on securing reduced duties for its industrial goods, automobiles—particularly in the electric vehicle (EV) sector—and agricultural and dairy products.
Official Optimism with a Note of Caution
Indian Commerce Secretary Rajesh Agarwal has publicly affirmed that the deal is “close,” stating that any final, unresolved issues would be elevated to the “political level” for a swift resolution, underscoring the commitment from both capitals.
However, he also injected a note of realism, cautioning that trade negotiations are inherently unpredictable and can face last-minute hurdles. Despite this caution, the shared goal of concluding the initial framework by the end of the year remains clear.
The potential deal comes as India’s economy recently reported its fastest growth in 18 months, a factor that may provide New Delhi with additional leverage and resilience at the negotiating table. A successful agreement would not only resolve immediate trade disputes but also solidify one of the most critical geopolitical partnerships of the 21st century.
