Over the past few months, numerous headlines have touted that the India Union Trade Agreement is nearing completion. But talks did not end with a concrete agreement between India and the U.S. — the Bilateral Trade Agreement (BTA) has yet to be signed after several rounds.
So, what’s taking so long?
The proposed India-US Trade Agreement, seen as the next step towards a future Free Trade Agreement (FTA)
This aims to lower US import tariffs, improve market access, stimulate investment, and boost economic relations.
USTR India trade statistics show that India and the USA recorded goods trade of over US$149.4 billion in 2025, with the USA among India’s largest trade partners. India’s exports were valued at US$103.8 billion, and US exports to India were valued at US$45.6 billion.
Despite the significant trade figures, the two nations are still talking about a final deal.
The biggest obstacle is tariffs.
India is seeking better tariff terms than those offered by other manufacturing nations such as Vietnam, Bangladesh, Thailand, and Mexico. Just lowering tariffs is not enough. India is looking for a real competitive edge for its businesses.
Commerce Minister Piyush Goyal has stated that India will never agree to a deal that is not beneficial to its exporters.
The second important consideration is India’s trade policy. The government is trying to find a balance between export and the farmers’, MSMEs’, and domestic manufacturers’ interests.
Local industries in the United States are under pressure to allow greater access to their markets for foreign products. Such internal factors can slow down negotiations with foreign partners.
But geopolitics has also entered the picture, beyond economics. These days, almost all key trade talks are being shaped by supply chain diversification, energy security, and strategic trade partnerships. These concerns have nothing to do with tariffs, but they undeniably impact the rate of negotiations.
The good news is, neither country is pulling out of the negotiating table. Both governments remain committed to reaching an interim agreement before advancing to a comprehensive India-US Free Trade Agreement, and officials say the talks are progressing well.
The news is welcome for businesses and investors. A well-negotiated agreement may enhance:
1- India–US export volumes
2. Facilitate greater market access
3. Attract new foreign investment, and
4. Boost long-term economic cooperation.
The delay does not indicate that negotiations have broken down, but rather that the deal is significant for both economies.