India-US Trade Agreement Expected to Conclude This Year, Economic Survey 2026 Indicates
India's ongoing trade negotiations with the United States may finally reach completion this year, according to the Economic Survey 2026 presented in Parliament by Finance Minister Nirmala Sitharaman on Thursday. The development is anticipated to help reduce uncertainty on the external front for India's economy.
Survey Highlights Potential Conclusion of Bilateral Talks
"At the same time, ongoing trade negotiations with the United States are expected to conclude during the year, which could help reduce uncertainty on the external front," the Economic Survey stated. This optimistic projection comes as both nations have been engaged in bilateral trade discussions since March of last year, with six rounds of talks completed to date.
The Survey further emphasized that India must enhance its competitive manufacturing capacity to fully capitalize on trade agreements, including the free trade pacts it has signed. While current global conditions present external uncertainties for the country, the document noted these do not create immediate macroeconomic stress.
Challenges and Global Trade Context
The Economic Survey cautioned about several factors that could impact India's trade performance:
- Slower economic growth in major trading partners
- Tariff-driven disruptions to global trade flows
- Volatility in international capital movements
These elements could periodically weigh on export performance and affect investor sentiment, according to the government assessment.
Background of India-US Trade Negotiations
Progress in the trade talks has faced challenges following the Trump administration's imposition of steep 50% tariffs on Indian goods beginning August last year. These tariffs consist of:
- A 25% reciprocal duty imposed in April 2025
- An additional 25% penalty linked to India's purchase of Russian crude oil, which the United States claims supports Moscow's military operations in Ukraine
Despite these obstacles, sources within the Ministry of External Affairs have indicated that negotiations have made substantial progress and that the long-anticipated trade agreement could be finalized "any day now." These comments, shared with ANI, emerge amid heightened trade tensions between the two nations.
Strategic Trade Developments
The update on India-US trade negotiations follows India's recent conclusion of free trade agreement talks with the European Union, described by officials as the "mother of all deals." With the India-EU FTA now completed, New Delhi has redirected its focus toward finalizing the trade pact with Washington.
The potential conclusion of the India-US trade agreement represents a significant development in bilateral economic relations, potentially opening new avenues for trade and investment between the world's largest democracy and one of its most important economic partners.
