India and US Finalize Phase One of Trade Deal, Target $500 Billion by 2030
India and the United States have finalized the terms of reference for the initial phase of a bilateral trade agreement, aiming to boost bilateral trade to $500 billion by 2030 and deepen strategic economic ties.
The two nations had earlier agreed, in February, to collaborate on the first stage of the trade pact, aiming to finalize it by the end of this year. The broader goal is to boost bilateral trade to $500 billion by 2030.
Phase One Deal Signals Intent to Reach $500 Billion Trade Target
The bilateral trade agreement is part of “Mission 500,” an ambitious initiative to more than double current trade volumes and position India as a key partner in global supply chains, especially as US companies seek to diversify away from China. The deal is expected to cover a wide range of sectors, including energy, critical minerals, technology, and manufacturing, with India open to considering zero-duty imports from the US in select industries under its Production-Linked Incentive (PLI) schemes.
Trump’s Reciprocal Tariff Push Adds Urgency to India–US Trade Reset
On April 2, dubbed “Liberation Day,” President Trump announced reciprocal tariffs, marking a significant shift towards greater US trade protectionism. He signed an executive order mandating a 10 percent base tariff on all imports starting April 5, citing long-standing trade imbalances and the need to safeguard US domestic industry.
While the 10 percent tariff applied broadly, steeper duties were imposed on countries with large trade surpluses with the US — China being the primary target.
US–China Trade War Escalates While India Reduces Import Duties
This move escalated the US–China trade conflict. Tariffs on Chinese goods were raised to 54 percent and then surged to 145 percent. In response, China raised tariffs on US products to 125 percent and imposed additional export restrictions, particularly on key rare earths.
Meanwhile, India has taken steps to ease friction, slashing duties on thousands of items and signaling openness to trade cooperation with Washington.
Conclusion
The finalization of the first phase of the India-US trade deal marks a significant step toward achieving the ambitious $500 billion trade target by 2030. As both nations continue to negotiate and implement the agreement, the focus will be on expanding market access, reducing trade barriers, and strengthening economic ties across various sectors.
