The proposed bilateral trade agreement between the US and India should be accelerated since it might help ensure preferential market access, enhance investor safeguards, and promote technical collaborations between the two nations.
The agreement is essential for India to resolve long-standing non-tariff barriers in industries specifically mentioned in the US tariff declaration, such as chemicals, telecom equipment, and medical devices. In these delicate industries, Mutual Recognition Agreements (MRAs) for standards and testing procedures may be a calculated move toward lowering regulatory barriers and enhancing market accessibility.
India’s major export industries may experience short-term pressure from the new US tariffs, but there are substantial long-term benefits to the larger strategic environment.
India can protect present trade volumes and establish itself as a key participant in the future US- centric global supply chain architecture by utilizing its sectoral strengths, policy incentives, differential tariff exposure, and diplomatic engagement. To turn this issue into a game-changing economic opportunity, strategic action in trade negotiations, investment promotion, and regulatory alignment will be essential.
From a policy perspective, these events give India an opportune chance to start or quicken talks with the US on a limited-scope free trade deal or a bilateral investment treaty.
Indian exports will be significantly impacted by the US’s imposition of an additional 26% import duty, particularly in sectors like electronics, textiles and apparel, gems and jewelry, and electrical and telecom equipment, which together accounted for roughly $37 billion in exports to the US in 2024.