India-US Trade Deal Approaches Finalization, According to Commerce Secretary
The India-US trade deal is nearing completion, with both countries finalizing a framework for preferential market access. Commerce Secretary Rajesh Agrawal announced on Wednesday that a few outstanding issues are still under discussion, but the agreement is expected to be signed at an appropriate time. He emphasized the need for both nations to ensure preferential access to each other’s markets, given India’s most-favored-nation (MFN) tariffs and the US’s executive tariffs.
Agrawal noted that businesses in both countries are already engaging actively and are satisfied with the progress made thus far.
India works on other trade deals
Agrawal provided updates on India’s other trade negotiations, stating that the India-Chile free trade agreement is in its final stages, with some areas still being discussed. He anticipates progress in the next two to three months. Additionally, India aims to finalize the India-New Zealand free trade agreement as soon as possible, potentially by October.
On the issue of freight costs impacting exporters, Agrawal mentioned that the government is collaborating with exporters to ensure access to ships and containers, aiming to minimize cargo delays and costs. He reported that exports grew by over 15% in the first four months, indicating that the impact of higher freight costs has not been as significant as expected.
India seeks wider services export base
Agrawal highlighted the need for Indian industry to diversify its services exports beyond IT/ITeS and professional services to achieve sustainable growth. In the fiscal year 2025-26, India’s total exports reached $863 billion, with services contributing $421 billion. However, IT/ITeS services account for approximately 50% of total exports, while professional services contribute another 30%.
He stated that diversification is essential for long-term sustainable growth. Agrawal pointed out that India has the potential to offer a broader range of services to global markets, with technology serving as a key avenue for this diversification. Currently, India’s share of the global financial services market is about $8 billion, or just over 1% of global trade.
Fintech, remittances offer growth opportunities
Agrawal emphasized the global expansion opportunities for India’s fintech sector, particularly in the Global South, leveraging the country’s expertise in digital payments, lending, insurance, and trade finance. He noted that reducing the average cost of remittances for Indian migrant workers from 5-6% to 3% could provide an additional $5 billion to them. A similar reduction on a global scale could benefit the global migrant population by $30 billion.
The global cross-border payment market is valued at approximately $182-190 billion and is projected to grow to $350-360 billion by 2032. The cards and payments market, currently around $1 trillion, is expected to reach $1.5 trillion by 2028-29. Agrawal cited the Unified Payments Interface (UPI) as an example of digital public infrastructure that enhances financial inclusion and reduces transaction costs.
India eyes bigger e-commerce, fintech exports
Agrawal reported that India currently accounts for about $5 billion in e-commerce exports, compared to $1 trillion in global e-commerce trade. He noted that India has signed nine trade agreements over the past five years with economies totaling a combined GDP of $60 trillion. Additionally, 23 countries have signed memorandums of understanding with India for cooperation on digital public infrastructure.
Regarding fintech services exports, Agrawal stated that capturing even 10% of the relevant trade could increase India’s exports from $8 billion to between $60 billion and $80 billion.
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