India, US progressing on bilateral trade agreement; first tranche expected by autumn: Sitharaman

New Delhi: Finance minister Nirmala Sitharaman on Monday said India hopes to finalize the first tranche of a bilateral trade agreement with the US by the end of the American autumn season that runs from mid-September to mid-December.

Speaking at an interaction with the Indian diaspora in San Francisco, Sitharaman said talks are progressing steadily, with both sides working to resolve outstanding issues and laying the groundwork for a broader trade partnership.

"The progress of the agreement (of the trade agreement) that we are working on, at least the first tranche, is something which we hope to conclude positively by the fall of this year," she said.

Fall is used for autumn in North America.

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Sitharaman is on an official visit to the US from 20-25 April to attend the Spring Meetings of the International Monetary Fund (IMF) and World Bank and meet her US counterpart Scott Bessent.

She said India is actively engaging with the Trump administration for a bilateral trade agreement.

"The priority that we gave to engage with the government here is more than obviously seen with the Prime Minister (Narendra Modi) himself visiting the United States in February. You also had the commerce minister come (to the US)," Sitharaman said.

"I came here because I have the IMF-World Bank meetings. But I am scheduled to meet the Treasury Secretary, my counterpart here," she said adding that US vice president J.D. Vance, who is currently on an official visit to India is set to meet Modi soon.

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"In between all this, the additional USTR (junior trade minister) had visited India to see the progress or to engage with the negotiating team which is dealing with the tariff-related negotiations and with the bilateral trade agreement that we want to sign," she added.

In February, India and the US agreed to pursue the first phase of a trade deal in 2025, aiming to boost bilateral trade to $500 billion by 2030.

Earlier in April, the US announced a 26% reciprocal tariff on Indian exports, citing India's average 52% import duty on American goods.

The move, part of President Donald Trump's ‘Liberation Day’ tariff plan, included a standard 10% duty on imports and higher rates for countries with large trade surpluses with the US.

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However, their implementation has been put on hold for 90 days—until 9 July—allowing time for nations to negotiate a trade deal with the US.

India's growth

Meanwhile, Sitharaman said India is firmly on track to reducing its fiscal deficit, noting that a clear consolidation roadmap was laid out in 2021 following a pandemic-induced spike in spending.

“We set annual targets and committed to bringing the deficit below 4.5% by 2026," she said adding that the glide path is being followed diligently.

Sitharaman also highlighted India's progress in reducing its debt-to-GDP ratio after it spiked during the pandemic.

Following the pandemic, the ratio crossed 62%, but within four years, it has been brought down to 57.4%, she said.

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"So within four years you see clear steps being taken to bring the debt-to-GDP number to acceptable levels and in the July budget we have very clearly said that by 2030 the debt to GDP (ratio) will come closer to 50%," she added.