The BGA India team, led by Non-Executive Chairman Amb. Alok Prasad, wrote an update to clients on the latest development in India’s trade discussions with the United States, United Kingdom, and European Union.

Context

  • India’s trade delegation, led by Commerce and Industry Minister Piyush Goyal, concluded a four-day visit to the United States May 23. During the visit, Goyal met with his counterpart Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer to advance a bilateral trade agreement. India has proposed a three-phase framework for the agreement, targeting completion of the first phase before the 90-day pause on tariffs ends July 9.
  • India and the United Kingdom concluded negotiations May 6 on the “ambitious and mutually beneficial” free trade agreement and double contribution convention. Once signed, the deal is expected to double bilateral trade — currently at $60 billion — by 2030, strengthening economic ties and strategic cooperation.
  • Goyal met EU Commissioner Marcos Sefcovic May 23, after the two sides concluded the 11th round of negotiations, to advance a two-phased free trade agreement with 23 chapters. The first phase will be an “early harvest deal” covering areas of quick consensus and immediate implementation. The second phase will be a comprehensive agreement addressing complex issues.

Significance

  • India has proposed narrowing its average tariff gap with the United States, aiming to secure exemptions from current and future tariff hikes. This marks one of the most significant overhauls of India’s trade barriers across all product categories, irrespective of trade volumes.
  • India remains committed to working closely with the European Union to conclude a fair, balanced and ambitious free trade agreement by the end of 2025, reflecting the shared values and economic aspirations of both partners.


Implications

  • As India works with the United States to finalize a bilateral trade agreement, it is also accelerating its strategic efforts to diversify exports to alternate trade blocs such as the United Kingdom and the European Union. These are in addition to signed deals with Australia, the United Arab Emirates and the European Free Trade Association. India’s strategy is expected to include expediting new trade routes, such as the India-Middle East-Europe Economic Corridor.
  • India’s trade policy is undergoing a fundamental shift by opening up market access to Western economies in return for increased investments, technology diffusion and stronger supply chain connectivity.

We will continue to keep you updated on developments in India as they occur. If you have any questions or comments, please contact BGA Senior Director Vaman Desai at vdesai@bowergroupasia.com.

Best regards,

BGA India Team

A small ginko leaf

Non-Executive Chairman

Alok is one of India’s most respected foreign policy, national security and international relations experts. Based in New Delhi, he maintains unparalleled networks in India’s government and civil service, business, civil society and diplomatic circles. Working with the BGA India team, he guides the development of client strategies and directs their implementation as non-executive chairman. Alok retired from government service in 2012 as India’s ambassador to Japan, where he led the mission during the negotiation and signing of the India–Japan Comprehensive Economic Partnership Agreement. He lived in Japan through the tsunami and the Fukushima nuclear disaster. Prior to his post ... Read More