India is reportedly set to negotiate with the United States under a proposed bilateral trade agreement (BTA), seeking improved access to critical technologies and trade concessions across multiple sectors. Aiming for parity with close American allies such as Australia, the UK, and Japan, India’s requests span telecom, biotechnology, AI, and semiconductors. The US, in turn, is pushing for concessions in areas such as electric vehicles, industrial goods, and agriculture. As trade discussions intensify, the trade surplus India enjoys with the US continues to grow, raising both opportunities and tensions over the widening gap in bilateral trade.
India's Push for Technology Access and Trade Concessions
India’s commercial negotiations with the United States are poised to center around gaining easier access to cutting-edge technologies. Under the proposed bilateral trade agreement (BTA), India is looking to secure access to vital sectors such as telecommunications, biotechnology, artificial intelligence (AI), quantum computing, and semiconductors, on par with US allies like Australia, the UK, and Japan. The hope is that easing export controls on these technologies will help India boost its innovation capabilities, enhance its technological infrastructure, and accelerate its economic growth.
The Indian government has requested that these sectors, which are crucial for the nation’s digital and industrial transformation, be prioritized for greater collaboration. Given that the US has historically relaxed export controls for close partners under frameworks like AUKUS, this is a key negotiating point for India. A more open channel for advanced technologies would potentially propel India’s industries forward in the global market, creating long-term competitive advantages.
Areas of Mutual Concession and Trade Focus
The ongoing trade talks also cover a range of other sectors, with India seeking duty concessions in labor-intensive industries such as textiles, gems and jewelry, leather, garments, plastics, and chemicals. Additionally, sectors including seafood (shrimp), oilseeds, and agricultural products like grapes and bananas are areas India hopes to see improved trade terms.
On the other hand, the United States is asking for its own set of trade advantages in the BTA. These include concessions for electric vehicles (EVs), industrial goods, wines, and certain petrochemical products. Notably, agriculture products such as apples, tree nuts, and dairy are also on the US list of priority items for tariff relief.
These contrasting demands indicate a delicate balancing act in the negotiations, as both nations aim to further deepen their economic relationship while addressing the specific needs of their industries.
Parity in Technology Access: A Delicate Negotiation
While India is pushing for access to critical technologies, particularly in sectors such as quantum computing and AI, US officials have signaled that India might not receive blanket exemptions or the same level of access granted to its closest allies. Despite the strategic importance of the US-India relationship, concerns persist on the Indian side regarding intellectual property protections, cybersecurity standards, and the country’s military relations with Russia, which could hinder full technology parity.
Ajay Srivastava, founder of the Global Technology and Research Institute (GTRI), emphasized that while the US is eager to strengthen its tech ties with India, especially within the framework of the Quad alliance, the US is unlikely to offer full parity. Instead, the US may suggest mechanisms like trusted partner programs, project-specific licenses, or expanded licensing exceptions for select Indian companies.
This cautious approach by the US reflects a pragmatic balancing of national security interests and the desire for deeper collaboration with India, a key partner in the Indo-Pacific region.
Bilateral Trade Growth and Surplus Dynamics
The US has remained India’s largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at USD 131.84 billion. Notably, India has maintained a trade surplus with the US, which reached USD 41.18 billion in goods during the same fiscal year, up from USD 35.32 billion the previous year. This surplus is indicative of India’s strong export performance to the US market, particularly in sectors like information technology, pharmaceuticals, and textiles.
The growth in India’s trade surplus with the US has raised concerns in Washington about the widening trade imbalance. While the US has voiced apprehension over this gap, India views the trade surplus as a testament to the competitiveness and robustness of its export sectors. The negotiations will likely seek ways to address this surplus, potentially through increased US exports to India or the granting of further trade concessions.
Conclusion
As India and the United States continue their trade negotiations under the proposed bilateral trade agreement, the stakes are high for both nations. India’s push for equal access to critical technologies, alongside concessions in labor-intensive sectors, is pivotal for its long-term economic strategy. Meanwhile, the US aims to secure its own trade interests, particularly in emerging industries like electric vehicles and agriculture.
With India’s growing trade surplus and the US’s desire for a more balanced trading relationship, the outcome of these negotiations could have profound implications for future economic cooperation. Both nations stand to benefit from a deeper, more strategic partnership, but the success of these talks will ultimately hinge on finding common ground on technology access, tariff relief, and long-term trade objectives.
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