India and the United States have taken a significant step forward in their economic partnership with the formal finalisation of the Terms of Reference (TOR) for negotiations on a comprehensive Bilateral Trade Agreement (BTA). This development follows a high-profile meeting between Prime Minister Narendra Modi and US Vice President JD Vance at the Prime Minister’s official residence in New Delhi, marking a pivotal moment in the ongoing efforts to deepen trade ties between the two nations.
The meeting, which lasted nearly two hours, was described as both cordial and productive. Both leaders welcomed the “significant progress” made in trade talks, with official statements from both sides highlighting the importance of this milestone. According to the US Trade Representative’s Office, the finalisation of the TOR builds upon the groundwork laid since Prime Minister Modi’s visit to Washington in February 2025, when he and President Trump agreed to launch negotiations for a new trade pact.
The TOR sets out a clear framework and roadmap for the upcoming negotiations, aiming to address long-standing issues such as tariff barriers, market access, and the need for greater reciprocity in the trade relationship. US Trade Representative Jamieson Greer noted that while the talks have made substantial headway, there remains a “serious lack of reciprocity” in the current trade dynamics, which the new negotiations hope to rectify by opening new markets for American goods and addressing practices perceived as unfair to US workers.
Strategic Goals and Broader Implications
The finalisation of the TOR comes at a critical juncture. The Trump administration’s tariff regime, which has been temporarily paused, looms in the background as both countries seek to avoid escalation and instead focus on mutually beneficial outcomes. The United States remains India’s largest trading partner, and both sides have set an ambitious target of more than doubling bilateral trade to $500 billion by 2030. Achieving this would not only enhance economic ties but also strengthen diplomatic and strategic cooperation in the Indo-Pacific region.
Both governments have expressed their commitment to concluding an interim trade deal even before the comprehensive agreement is signed, with a tentative timeline aiming for finalisation by September or October this year. Special Secretary Rajesh Agrawal, one of India’s top trade negotiators, is set to travel to the US for in-person talks, underscoring the urgency and seriousness with which both sides are approaching the process.
The broader context of the negotiations also includes cooperation in critical technologies, defence, energy, and people-to-people exchanges. The BTA is expected to create new opportunities for workers, farmers, and entrepreneurs in both countries, promoting job creation and supply-chain integration. The agreement is being framed as a “new and modern trade agreement” that reflects the evolving economic priorities of both nations, guided by India’s vision of ‘Amrit Kaal’ and America’s aspiration for a ‘Golden Age’.
In summary, the finalisation of the Terms of Reference for trade negotiations between India and the US marks a decisive step towards a more balanced and dynamic economic partnership. As negotiations proceed, the focus will be on achieving a fair, reciprocal, and forward-looking agreement that benefits citizens and businesses on both sides of the globe.
