Trade deal between India and US done & dusted: Piyush Goyal
India's Commerce and Industry Ministry indicated that negotiations for the India-US Bilateral Trade Agreement (BTA) are close to completion, with final conclusion linked to securing tariff treatment for Indian exports that is at least as favourable as that given to competing exporting countries.
The ministry also pointed to progress in India-EU trade engagement on climate-related regulatory issues, alongside ongoing negotiations with Canada and the Gulf Cooperation Council (GCC).
These parallel tracks form part of India's wider strategy of diversifying trade partnerships across major and regional economies following the conclusion of the India-EU Free Trade Agreement talks in January 2026.
Trade Agreement Typology — FTA vs CEPA vs BTA
Trade agreements vary in scope. A Free Trade Agreement (FTA) chiefly reduces or eliminates tariffs on goods trade. A Comprehensive Economic Partnership Agreement (CEPA) is broader, additionally covering services, investment, intellectual property rights, government procurement, and regulatory cooperation. A Bilateral Trade Agreement (BTA), as used in the India-US context, has been structured as an interim or "first tranche" arrangement covering an initial set of tariff and market-access commitments, with a more comprehensive agreement negotiated in subsequent phases.
Key Details
- India-UAE CEPA: signed 18 February 2022, entered into force 1 May 2022; targets $100 billion in goods trade and $15 billion in services trade by 2027; removed tariffs on over 80% of UAE-bound product lines
- CEPA is more comprehensive than a standard FTA, incorporating services and investment chapters
- The India-US BTA has proceeded as a staged "first tranche" interim deal, followed by continued negotiation on more complex chapters
The distinction matters for exam purposes because the India-US arrangement is explicitly a narrower, phased BTA, while the India-EU and India-UAE agreements are full FTA/CEPA instruments with wider sectoral coverage.
India-US Bilateral Trade Agreement — Status and Tariff Terms
Formal negotiations for a comprehensive India-US Bilateral Trade Agreement began in February 2025. An interim, first-tranche framework was announced in February 2026, under which the overall average US tariff on Indian goods was brought down from about 50% (which had included a punitive additional tariff linked to India's crude oil purchases) to 18%. India has committed to progressively lowering tariffs and non-tariff barriers on US goods, while sensitive sectors such as gems and jewellery, pharmaceuticals, smartphones, and select agricultural products retain zero reciprocal tariff treatment on the US side.
Key Details
- Negotiations formally launched: February 2025
- Interim tariff agreement announced: February 2026, cutting the overall average tariff from about 50% to 18%
- India's tariff exposure had earlier risen due to an additional punitive tariff tied to continued purchases of Russian crude oil, since scrapped under the interim deal
- Finalisation of the fuller BTA remains linked, per the ministry, to India securing tariff terms at least as competitive as those given to countries such as Vietnam and Bangladesh
This is the specific bilateral track the ministry described as "close to completion" — the remaining sticking point being comparative tariff treatment vis-à-vis competing exporters.
India-EU Free Trade Agreement and the CBAM Challenge
India and the European Union concluded negotiations on a Free Trade Agreement in January 2026, after on-and-off talks stretching back nearly two decades. The agreement is estimated to liberalise 92.1% of India's tariff lines, covering 97.5% of EU export value, with about half of these lines seeing immediate duty elimination. Despite an accompanying chapter on climate and decarbonisation cooperation, the FTA does not exempt Indian exporters from the EU's Carbon Border Adjustment Mechanism (CBAM), which entered its definitive, compliance-driven phase on 1 January 2026 after a 2023-2025 transitional reporting period.
Key Details
- India-EU FTA negotiations concluded: January 2026
- Tariff liberalisation: 92.1% of India's tariff lines, covering 97.5% of EU exports
- CBAM covers carbon-intensive imports such as iron and steel, cement, aluminium, fertilisers, hydrogen, and electricity
- CBAM's definitive (financial-obligation) phase began 1 January 2026, following a transitional reporting-only period from October 2023
- The FTA text includes a "technical dialogue" on CBAM implementation rather than a CBAM exemption, alongside an EU climate-cooperation funding pledge for India
The ministry's reference to "positive developments" on India-EU climate-regulation talks concerns this technical dialogue mechanism, since CBAM remains a live cost pressure on carbon-intensive Indian exports such as steel and aluminium even after the FTA's conclusion.
India's Expanding FTA Network — GCC and Canada Negotiations
India relaunched Free Trade Agreement negotiations with the Gulf Cooperation Council (GCC) in February 2026, after talks had remained suspended since 2011, with a further round of physical negotiations held in September 2026. Separately, India and Canada have been negotiating a Comprehensive Economic Partnership Agreement (CEPA), with successive rounds held through 2026 aimed at a broader bilateral trade agreement.
Key Details
- GCC comprises six member states (Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, and Oman), with a combined population of about 61.5 million and a combined economy of roughly $2.3 trillion
- India-GCC FTA talks relaunched via a Joint Statement in February 2026, after being suspended since 2011
- India-Canada CEPA: multiple negotiating rounds held through 2026, with a bilateral trade target of $50 billion by 2030 (bilateral goods trade stood at about $8.66 billion in 2024-25)
The ministry's mention of "advancements" with Canada and the GCC situates the US and EU tracks within a broader, simultaneous push to conclude trade agreements across multiple regions.
- India-UAE CEPA: signed 18 February 2022, in force 1 May 2022; targets $100 billion (goods) and $15 billion (services) trade by 2027
- India-US interim tariff deal: overall average US tariff on Indian goods cut from about 50% to 18% (February 2026)
- India-EU FTA: negotiations concluded January 2026; liberalises 92.1% of India's tariff lines covering 97.5% of EU export value
- CBAM definitive/compliance phase began: 1 January 2026 (transitional reporting phase ran October 2023-December 2025)
- India-GCC FTA talks relaunched: February 2026, after suspension since 2011; GCC combined economy approximately $2.3 trillion, population approximately 61.5 million
- India-Canada CEPA: bilateral trade target of $50 billion by 2030; 2024-25 bilateral goods trade approximately $8.66 billion