New Delhi: Commerce and Industry Minister Piyush Goyal has confirmed that India is in active dialogue with the United States for a potential Free Trade Agreement (FTA), even as trade tensions simmer due to recent tariff hikes by Washington. Goyal made the statement during an event hosted by industry body FICCI, where he outlined India’s broader trade engagement strategy with global partners.
Widening Global Trade Horizon
Apart from the United States, India is also actively negotiating trade deals with the European Union and New Zealand, said Goyal. He emphasized that ongoing dialogues are progressing constructively, and India remains committed to expanding its global trade footprint.
“We are in active dialogue with the USA and New Zealand,” said the Minister, adding that India has already signed FTAs with the UAE, Australia (interim), Mauritius, EFTA bloc, and the UK.
Goyal also revealed that India is in the final stages of concluding the second tranche of the trade agreement with Australia, which will build on the interim pact signed in 2022. Additionally, a trade pact with Oman is expected to be announced soon.
Read also: India, US in Talks for Bilateral Trade Agreement: Piyush Goyal Confirms at Industry Meet
India-US Trade Relations Under Pressure
The update comes against the backdrop of the US imposing a 50% import duty on Indian goods, including key labor-intensive exports such as shrimp, textiles, leather, and footwear, starting August 27. The sudden hike in tariffs has negatively impacted Indian exporters and strained trade relations.
India and the US began formal talks for a bilateral trade agreement in March 2025. So far, five rounds of negotiations have been completed. However, the sixth round, scheduled in August, was postponed by the U.S., indicating lingering issues or internal deliberations on both sides.
Despite the delay, government sources maintain that “things are on track,” with both nations aiming to conclude the first phase of the trade deal by Fall 2025.
Modi-Trump Exchange Signals Diplomatic Reset
The tensions are being diplomatically addressed at the highest levels. On Wednesday, Prime Minister Narendra Modi responded to remarks by U.S. President Donald Trump, who acknowledged ongoing efforts to overcome “trade barriers” between the two nations.
“India and the US are close friends and natural partners. I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership,” said Modi in a post on X (formerly Twitter).
Trump echoed similar sentiments, expressing confidence that a mutually beneficial deal would be achieved soon, and confirmed that he looked forward to speaking with Modi in the coming weeks.
This public exchange is being seen as a diplomatic reset, following weeks of trade tension.
India-US Trade Snapshot
- US is India’s largest trading partner, with bilateral trade in goods and services reaching $191 billion.
- The US is the third-largest source of FDI in India, with $76.26 billion in cumulative inflows between April 2000 and June 2025.
- The US accounts for 10% of India’s total FDI, underscoring the critical importance of the economic partnership.
Strategic Importance of the Trade Deal
A Free Trade Agreement with the U.S. would significantly improve market access, reduce tariff barriers, and enhance competitiveness for Indian exporters—especially in sectors like IT services, textiles, pharmaceuticals, and agriculture.
For the U.S., India presents a massive and growing market with a large middle class, increasing digital adoption, and a business-friendly reform agenda, especially under the ‘Make in India’ and ‘Atmanirbhar Bharat’ campaigns.
Conclusion
As global economic dynamics shift rapidly, India’s proactive engagement in securing trade pacts—especially with strategic partners like the U.S.—reflects its ambition to emerge as a central player in global supply chains. The successful conclusion of a bilateral trade agreement would not only resolve ongoing friction but also lay a foundation for deeper economic cooperation in the years ahead.
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