Speaking at a panel hosted by CNBC-TV18 at FICCI’s AGM, Agrawal said the government had earlier expected the India-US BTA to be completed “by fall”, but “things have changed from February” with global trade witnessing sharp realignments.
“In between, we found lot of changes in the global trade landscape. Reciprocal tariffs were imposed to reflect trade deficit with trade partners and create a revenue stream for the US government,” he said.
Agrawal stressed that negotiations have now split into two layers. “We are engaged in a protracted negotiation on a framework trade deal, which will try to address the reciprocal tariff situation… first the framework trade deal. We have engaged very deeply with the US team, we are trying to iron out most of the issues.”
He said the BTA has effectively shifted in scope because of Washington’s reciprocal tariff policy, which aims to narrow the US trade deficit. According to him, this policy change has altered the structure and sequencing of the India–US trade negotiations.
Agrawal noted that several political decisions remain unresolved and that any eventual agreement would require both countries to address their respective tariff regimes. He added that the BTA is likely to take longer as officials must work out a comprehensive mechanism for handling reciprocal tariffs.
Negotiations are continuing steadily, with both governments holding frequent virtual meetings. The next round of in-person discussions is yet to be finalised.
Despite the challenges, Agrawal expressed confidence that the two sides could arrive at a solution within this calendar year. He emphasised that India’s economic characteristics and domestic sensitivities will play a decisive role in shaping the final outcome.