India Hopes for an Early US Trade Deal, Flags China's Non-Tariff Barriers
The Union Finance Minister said India hopes its trade deal with the United States is signed soon, and that an early deal would also be good for global trade as a whole.
The remarks came during an interaction on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Thailand.
A day earlier (15 October 2026), the Commerce Ministry said the first tranche (first part) of the India-US Bilateral Trade Agreement had been finalised and was in legal drafting and final review. It has not yet been signed.
The Finance Minister said Indian exporters face problems in China because of non-tariff barriers (trade hurdles other than import taxes, such as strict rules, licences and slow approvals).
She also spoke for wider use of the rupee to settle trade, to help countries that are short of "hard currency" such as the US dollar.
She said strong public investment in infrastructure (government spending on roads, railways, ports and similar assets) is key to keeping India's growth steady despite global disruptions.
India-US Bilateral Trade Agreement (BTA)
The India-US Bilateral Trade Agreement (BTA) is a trade deal that India and the United States are negotiating. Its aim is to make it cheaper and easier for each country to sell goods and services to the other. It does this by cutting import taxes (tariffs), removing other trade hurdles and setting common rules. The talks began in February 2025, and the deal is being done in stages, called tranches.
The Finance Minister's hope that the deal is "inked soon" refers to signing this first tranche. Once signed, India's exporters would get clearer tariff terms in their largest export market, which matters at a time when world trade rules are unsettled.
Non-Tariff Barriers (NTBs): Types and the WTO Framework
A non-tariff barrier (NTB) is any trade hurdle, other than an import tax, that makes it harder or costlier to sell goods in another country. Examples are quotas (limits on quantity), import licences, strict product standards, testing and certification rules, and slow customs checks. Some such rules protect health or safety and are allowed; they become "barriers" when they are used mainly to keep foreign goods out.
The Finance Minister said Indian exporters struggle in China mainly because of non-tariff barriers, not tariffs. Approvals for farm goods, medicines and other products can take years, so even low tariffs do not help Indian goods enter the Chinese market.
India-China Trade Deficit: Structure and Causes
India's trade deficit with China is the gap between what India buys from China and what it sells to China. India imports large amounts of electronics, machinery, chemicals and medicine inputs from China, but sells far less in return, mostly raw materials. This gap is now India's largest with any single country.
The Finance Minister linked China's non-tariff barriers to this deficit. If Indian goods cannot clear China's rules and approvals, India cannot sell more to China, and the gap keeps widening even as Indian exports to China grow.
- India-US BTA: talks launched 13 February 2025; interim framework 6 February 2026; first tranche finalised and in legal review on 15 October 2026, not yet signed
- "Mission 500": target of $500 billion India-US trade by 2030
- India's exports to the US: about $50.81 billion in April to September 2026, up 11.1%
- India-China trade deficit 2025-26: about US$112 billion; imports about US$131.6 billion, exports about US$19.5 billion
- China: India's largest trading partner in 2025-26 (about US$151 billion)
- NTMs affect about 77% of world trade (UNCTAD and World Bank)
- WTO in force from 1 January 1995, with the SPS and TBT Agreements
- The remarks were made on the sidelines of the IMF-World Bank Annual Meetings, Bangkok, October 2026