India is expected to press the United States to ease export controls and grant it access to critical technologies on par with key US allies such as Australia, the UK, and Japan under the proposed bilateral trade agreement (BTA).
Sources indicate that India will likely request relaxation of export restrictions in sectors such as telecom equipment, biotechnology, artificial intelligence (AI), pharmaceuticals, quantum computing, and semiconductors. Access to advanced technologies in these fields would help India bolster its technological infrastructure, fuel innovation, and enhance economic growth.
Trade concessions for labour-intensive sectors
In return, India is also expected to seek duty concessions for various labour-intensive sectors, including textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas. These sectors are integral to India’s export economy, and securing duty reductions would provide a significant boost to these industries. The BTA discussions aim to create a more favourable environment for India’s export-oriented sectors while improving access to the US market for a wide array of products.
US demands for concessions
On the other side, the United States is expected to push for duty concessions in several sectors, including industrial goods, automobiles (with a particular emphasis on electric vehicles), wines, petrochemical products, dairy, and agricultural items such as apples and tree nuts. These sectors are seen as strategic to the US, and any agreement will likely reflect both sides’ need to gain reciprocal market access while accommodating each other’s economic interests.
Easing export controls for technology collaboration
India’s specific request to the US is to receive similar treatment as its close allies regarding access to advanced technologies. This would involve easing export controls for high-tech sectors like telecom, biotechnology, and AI. The goal is to foster deeper collaboration in these critical areas and facilitate India’s technological advancement. The US has already made such concessions for other allies, such as Australia, the UK, and Japan, as part of strategic pacts like AUKUS. These countries have benefited from relaxed export controls in sectors like defence and dual-use technologies.
While the US is keen to strengthen technological ties with India, especially within the Quad framework, it may not offer full parity to India in terms of export control easing. Concerns over India’s export controls, intellectual property protections, cybersecurity standards, and its military ties with Russia could influence Washington’s decision. Instead of blanket exemptions, the US might offer alternatives like trusted partner programs or project-specific licenses for select Indian entities.
India-US trade relations
The India-US trade relationship continues to thrive, with the US remaining India’s largest trading partner for the fourth consecutive year in 2024-25. Bilateral trade between the two countries was valued at USD 131.84 billion, accounting for a significant portion of India’s total exports. Despite this growing trade relationship, the US has expressed concerns over India’s widening trade surplus. In 2024-25, India posted a goods trade surplus of USD 41.18 billion with the US, up from USD 35.32 billion the previous year, reflecting a growing trade imbalance that will likely be a key issue in the negotiations.
Trade agreement
The terms of reference (ToRs) for the proposed BTA have already been finalized, covering a range of issues such as tariffs, goods, services, rules of origin, non-tariff barriers, and customs facilitation. With both sides eager to resolve remaining differences, an Indian official delegation visited Washington recently to engage in preliminary talks. The BTA negotiations are expected to gain momentum, especially after the 90-day tariff pause window, which will allow for a formal launch of discussions aimed at reaching a comprehensive trade agreement.
(With PTI inputs)