US says major trade progress made with India during Vance visit

New Delhi: The US said it’s made “significant progress” toward a bilateral trade deal following talks between Vice President JD Vance and Indian Prime Minister Narendra Modi on Monday, laying down a roadmap for further discussions that New Delhi hopes may shield it from additional tariff hikes.

The two sides have finalised the terms of reference for negotiations on “a new and modern trade agreement,” the White House said in a statement during Vance’s four-day visit to India.

The vice president and his family are on a high-profile trip that underscores India’s importance among countries seeking trade talks with the US. For Modi, the pressure is on to shield Asia’s third-largest economy from disruptions in global trade by striking an early deal with the Trump administration.

“The progress shows that India is better placed than its regional rivals” on trade talks with the US, said Amitendu Palit, an economist specializing in international trade and investment at the National University of Singapore. “Given the pace of negotiations, India has a solid chance of getting a reprieve,” from US’s reciprocal tariffs, he added.

Barring a trade deal, India faces tariffs of up to 26% on its exports to the US under President Donald Trump’s April 2 levies, currently on a 90-day pause. Trump has repeatedly criticized India for its high tariffs.

In trade discussions with the South Asian nation, the goals for Washington include increasing market access for US goods, reducing India’s tariff and non-tariff barriers and securing other commitments, the US Trade Representative said Monday in a separate fact sheet.

Vance arrived in New Delhi on Monday with his family after spending three days in Italy. After meeting with Modi on Monday, the vice president will spend Tuesday in Jaipur, where he is due to give a speech focused on the US and India’s shared economic priorities.

Monday’s meeting between Vance and Modi at the prime minister’s residence also included a larger meeting with staff and a dinner with the vice president’s wife, Usha Vance, and their three children.

During a visit by Modi to the White House in February, the two sides said they planned to conclude the first tranche of a bilateral trade deal by the fall. In a statement Monday after his meeting with Vance, Modi said he looks forward to a visit by Trump to India later this year.

“An early start on the bilateral trade pact and being a strategic ally to the US are both a positive for India,” said Sonal Varma, an economist at Nomura Holdings Inc. “The pace of the talks show that for the initial tranche, the fall deadline is achievable, even though the whole deal will take much longer. “

Separately, Indian Finance Minister Nirmala Sitharaman on Monday said India was one of the first countries to approach the Trump administration and start trade negotiations. “India’s biggest and top-most trading partner is the United States of America and that importance is not lost in today’s government in India,” she said during a speech at the Hoover Institution at Stanford University.