Union Minister of Commerce and Industry Piyush Goyal said India and the U.S. are committed to increasing bilateral trade to $500 billion and negotiating a “strong” trade agreement within the next 6-8 months. File
| Photo Credit: ANI

Piyush Goyal Goyal said once his U.S. counterpart takes charge, both countries will discuss the contours of the pact.

India and the U.S. are committed to increasing bilateral trade to $500 billion and negotiating a “strong” trade agreement within the next 6-8 months, Commerce and Industry Minister Piyush Goyal said on Tuesday (February 17, 2025).

During the recent visit of Prime Minister Narendra Modi to Washington, India and the U.S. announced to more than double the two-way commerce to $500 billion by 2030 and negotiate the first tranche of a mutually beneficial, multi-sector bilateral trade agreement (BTA) by fall of 2025.

Mr. Goyal said once his U.S. counterpart takes charge, both countries will discuss the contours of the pact.

“…In the next 6-8 months, by establishing a strong trade agreement, we are committed to increasing trade to $500 billion,” Mr. Goyal told reporters here on the sidelines of CII’s India-Qatar Business Forum meet.

He added businesses of both the countries are excited about the agreement.

When asked if the pact would have chapters related to goods, services and investments, he said, “My counterpart has not yet confirmed in the U.S…After the (confirmation), we will do talks and then only we can decide the way forward”.

Normally in a free trade agreement, two trading partners either eliminate or significantly reduce customs duties on the maximum number of goods traded between them. Besides, they ease norms to promote trade in services and boost investments.

During the first term of U.S. President Donald Trump, the two countries had discussed a mini-trade deal, but it was shelved by the Joe Biden administration as they were not in favour of such pacts.

In 2023, the U.S. and India bilateral trade in goods and services stood at $190.08 billion ($123.89 billion in goods and $66.19 billion in services trade). In that year, India’s merchandise exports to the US stood at $83.77 billion, while imports were $40.12 billion, leaving a trade gap of $43.65 billion in favour of India.

The country’s services export to America was $36.33 billion in 2023, while imports were aggregated at $29.86 billion. The trade gap (difference between imports and exports) was $6.47 billion in favour of New Delhi.

During 2021-24, America was the largest trading partner of India. The U.S. is one of the few countries with which India has a trade surplus.

In 2023-24, the U.S. was the largest trading partner of India with $119.71 billion bilateral trade in goods ($77.51 billion worth of exports, $42.19 billion of imports and $35.31 billion trade surplus).

India received $67.8 billion in foreign direct investments from America during April 2000 and September 2024.

“There is work ongoing with a number of economies, including the U.K., on intellectual property (IP) rights and modernisation in an effort to improve Indian protocols,” Union Minister of Commerce and Industry Piyush Goyal has said.

Responding to questions from a gathering of Indian-origin chartered accountants (CAs) from the U.K. Chapter of the Institute of Chartered Accountants of India (ICAI) at the conclusion of his London visit on Wednesday evening, the Minister – a qualified CA – covered a range of topics including IP rights and corporation tax to environmental, social and corporate governance (ESG).

He said the process to harmonise with international standards is high on the government’s agenda because integrating with world thinking on standards and IP is important for the fast-paced growth of the Indian economy.

“With the UK we are working on IP rights or IP modernisation. Our effort is to improve the Indian protocols around intellectual property rights and areas associated with it, but I feel it will have to be a little more gradual process,” said Goyal.

“Similarly, we are working very actively on quality standards in India. The BIS (Bureau of Indian Standards) for non-food products and FSSAI (Food Safety and Standards Authority of India) on food products are trying to develop standards. Wherever it’s possible, we are trying to harmonise also with international standards. But it’s not possible in everything…we are roughly at about 90 per cent of our standards harmonised with what is generally accepted standards,” he said.

“But I can assure you we are conscious that if we have to develop our economy at a fast pace, we’ll also have to integrate ourselves with the world thinking on standards, on intellectual property. Though it may be a process, we are moving very rapidly and hoping to become a preferred destination for other countries. So, it’s very high on our agenda,” he added.

The minister forecast that over the next three or four years, Indian standards will be seen as world class and accepted across the world.

While he veered away from any direct reference to the ongoing India-UK free trade agreement (FTA) while “negotiations are on”, the minister mentioned that the issue of transfer pricing was among the matters that had emerged as part of efforts to find wider solutions in the trade talks.

“There is no written rule or unwritten rule that any one geography or one set of people are honest and the other set is dishonest… so transfer pricing will remain an issue by issue, case by case subject and there can’t be a one size fits all,” he said.

Asked about the corporate tax levels in India, the minister was clear that India’s rates were at a comparable level having been reduced significantly in the last nine years.

“We have been successful through G20 in getting the world to bring in a minimum corporate tax of 15 per cent,” he noted.

Goyal, who was in the UK on a three-day visit which coincided with the 11th round of FTA negotiations with the UK, met his British counterpart Kemi Badenoch to build momentum behind the process. The Commerce Ministry issued a statement following the meeting to say that “considerable progress was achieved during their frank and open discussions on various difficult issues”.