Overview of U.S.–India Trade Agreements and Trade Barriers (pre-2025)
Where do U.S.–India trade ties really stand before the headlines hit?
“India’s average tariff is still roughly five times higher than America’s, and neither side has a formal free-trade pact.”
Let’s evaluate the trade landscape we actually have with India before judging the new deal President Trump is expected to unveil this week. Despite booming two-way commerce, Washington and New Delhi still rely on a patchwork of WTO rules, ad-hoc market-access swaps, and high-level dialogues rather than a full-blown free-trade agreement. India’s average tariffs hover near 17 percent—about five times higher than U.S. rates—and a maze of licensing requirements, quality-control orders, and data-localization rules still constrains American exports. Knowing this baseline is essential: any “breakthrough” will be credible only if it meaningfully lowers those barriers or sets a clear path to do so.
The United States and India have a growing trade relationship, with bilateral goods trade reaching about $129 billion in 2024 (in India’s favor by a $45.7 billion surplus). Despite this growth, the two countries did not have a comprehensive free trade agreement (FTA) in place as of 2024, and trade was conducted largely under World Trade Organization (WTO) rules. Over the years, they have relied on multilateral commitments and incremental deals to facilitate trade. Below is a detailed overview of formal and informal trade arrangements between the U.S. and India up to 2024, followed by a comparison of tariff structures and an examination of key non-tariff barriers on both sides.
Formal Bilateral Trade Agreements
No Comprehensive FTA: The U.S. and India have no formal bilateral FTA or preferential trade agreement in force. Unlike India’s trade with some other partners, trade with the U.S. occurs on normal (Most-Favored Nation) terms. Past efforts to negotiate a broad trade deal have not yet produced an FTA, though talks intensified in the early 2020s toward an “early harvest” deal. In April 2025, for example, both sides were working on a “first phase” trade package, aiming for a “win-win” deal to boost trade to $500 billion by 2030 (these negotiations were ongoing and not concluded by 2024).
Generalized System of Preferences (GSP): One significant (though unilateral) arrangement was the U.S. GSP program, which had provided duty-free access to certain Indian exports since the 1970s. However, in 2019 the U.S. revoked India’s GSP beneficiary status, citing insufficient market access for U.S. goods. This termination of GSP affected about $5.6 billion of India’s exports, which lost their special duty-free treatment. Sectors like pharmaceuticals, textiles, agricultural products, and auto parts were impacted by the change, as those goods began paying the normal U.S. tariffs. The removal of GSP marked a setback in bilateral trade relations and underscored U.S. demands for more reciprocal access.
Trade Policy Forum and Frameworks: In lieu of a treaty, the two countries rely on high-level dialogues. Notably, the U.S.–India Trade Policy Forum (TPF) was established in 2005 as a structured platform to discuss trade grievances and expand market access. The TPF, co-chaired by India’s Commerce Minister and the U.S. Trade Representative, met periodically (the 14th ministerial TPF was held in January 2024). While not a formal agreement, the TPF has produced incremental outcomes. For example, after the TPF’s revival in late 2021, India agreed to allow imports of U.S. pork for the first time, a breakthrough on a longstanding U.S. request. In return, the U.S. opened its market to Indian mangoes and pomegranates (which had been restricted due to phytosanitary rules). These market-access deals, though limited in scope, acted as informal “mini” trade agreements to address specific barriers.
Bilateral Investment and Other Agreements: The U.S. and India have not finalized a bilateral investment treaty in this period, despite on-and-off talks about protecting investors’ rights. They have, however, signed various memoranda of understanding (MoUs) to deepen economic ties. For instance, in March 2023 the countries signed an MoU on Semiconductor Supply Chain and Innovation Partnership, creating a framework for cooperation in chip manufacturing and resilient supply chains. In October 2024, during the U.S.–India Commercial Dialogue, they also inked an MoU to expand and diversify critical mineral supply chains (to collaborate on exploration, mining, and processing of critical minerals). While these are not trade agreements reducing tariffs, they facilitate trade and investment in strategic sectors. Other dialogues – such as the Commercial Dialogue (focused on standards and ease of doing business) and the CEO Forum (business leaders’ forum) – have been institutionalized since 2005, creating an ecosystem of “soft” agreements and understandings that complement the formal WTO commitments.
WTO and Multilateral Trade Arrangements
Both the U.S. and India are founding members of the World Trade Organization (WTO) (since 1995), and their trade relations are fundamentally shaped by WTO rules. WTO membership means that bilateral trade is governed by the Most-Favored Nation (MFN) principle – each side applies its general tariff rates and cannot discriminate arbitrarily. India and the U.S. have worked together (and occasionally clashed) in various WTO frameworks:
Uruguay Round Agreements: As WTO members, both countries adhere to multilateral agreements like the General Agreement on Tariffs and Trade (GATT), the Agreement on Agriculture, and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), among others. These set the baseline rules. For example, India’s tariffs are bound at certain ceilings under WTO commitments, and the U.S. must extend MFN tariff rates to Indian goods. However, India has often utilized the flexibility allowed to developing countries under WTO – something the U.S. has criticized. (In fact, USTR has noted that India “takes advantage of tariff flexibilities” under WTO rules to keep high duties.)
Information Technology Agreement (ITA): Both nations participate in the WTO’s Information Technology Agreement (ITA). India joined ITA in 1997, committing to eliminate import duties on a range of IT and telecom products. This plurilateral pact eliminated tariffs on computers, semiconductors, and other high-tech goods, benefiting U.S. tech exports to India and India’s IT hardware access. (However, it’s worth noting that as technology evolved, India did not join the expanded 2015 ITA-II, and disputes arose over India’s duties on newer tech products – see Non-Tariff Barriers below.)
Trade Facilitation Agreement (TFA): Both countries are signatories to the WTO’s Trade Facilitation Agreement, which came into force in 2017. India ratified the TFA in 2016, committing to customs reforms. Implementation of the TFA by both sides has streamlined customs procedures and improved transparency, which helps reduce red tape in U.S.–India trade. For example, provisions on expedited shipments and automation help exporters in both countries.
WTO Dispute Settlement: The WTO framework also provided a venue for resolving U.S.–India trade disputes. Over the years, the two had several cases at the WTO, ranging from agricultural bans to industrial tariffs. By late 2023, a significant milestone was achieved – all pending bilateral WTO disputes were mutually settled. Notably, the countries resolved a long-running dispute over India’s restrictions on U.S. poultry imports (India had lost a WTO case on its ban of U.S. poultry and had to comply). They also settled issues regarding India’s export subsidy programs and the U.S.’s steel/aluminum tariffs. In June 2023, India removed additional tariffs it had imposed on U.S. products like chickpeas, lentils, almonds, walnuts, apples, and others – these were retaliatory tariffs India had placed in response to earlier U.S. actions. The resolution of disputes in 2023 improved the trade atmosphere and was lauded by both governments.
Indo-Pacific Economic Framework (IPEF): Outside the WTO, the U.S. and India in 2022 joined the Indo-Pacific Economic Framework for Prosperity, a U.S.-led regional economic initiative. India chose to participate in three of IPEF’s four pillars – on supply chain resilience, clean economy, and fair economy (tax and anti-corruption) – but not the trade pillar. By mid-2023, the IPEF’s Supply Chains agreement was concluded (entered into force in 2024), which both the U.S. and India signed. While IPEF is not a traditional trade deal (and India was hesitant on the trade commitments), it represents a multilateral arrangement that could indirectly impact trade by improving supply chain cooperation and standards between the U.S. and India and other Indo-Pacific economies.
In summary, the WTO provides the broad rules under which U.S.–India trade occurs. Both countries’ commitments (like tariff bindings and dispute settlement) and joint participation in sectoral agreements (like ITA) have significantly influenced their trade relationship. Multilateral engagement has often been the backdrop against which bilateral issues are negotiated.
Informal Trade Understandings and MoUs
Beyond formal agreements, the U.S. and India have developed a network of informal understandings, dialogues, and MoUs to manage and enhance trade relations:
U.S.–India Trade Policy Forum (TPF): As mentioned, the TPF serves as the principal bilateral forum on trade matters. After a hiatus, it was revitalized in November 2021, which led to concrete outcomes. For example, at the 2021 TPF meeting, India agreed to grant access for U.S. pork and pork products (ending a ban that lasted nearly two decades). U.S. officials hailed this as a “significant development” for U.S. farmers. In turn, the U.S. facilitated the return of famed Indian mangoes to the U.S. market in 2022. These swaps were not formal treaty changes but rather mutually agreed market access deals brokered in the TPF dialogue. The TPF has also created working groups on goods, services, agriculture, and intellectual property, which identify barriers and negotiate fixes on an ongoing basis.
Commercial Dialogue and CEO Forum: The India–U.S. Commercial Dialogue, co-chaired by the U.S. Secretary of Commerce and India’s Commerce Minister, is another platform focusing on broader business cooperation (standards, investment, travel, etc.). Meetings of this dialogue (e.g. March 2023 in Delhi and October 2024 in Washington) coincided with signing of key MoUs. As noted, an MoU on Semiconductor Supply Chain and Innovation was signed in early 2023 to spur collaboration in chip manufacturing and export control cooperation. Similarly, in October 2024, an MoU on Critical Minerals was signed to jointly develop and secure supply chains for rare earths and other critical materials. These understandings are aimed at reducing strategic import dependencies and encouraging bilateral investment in these sectors, which in the long run facilitate trade (for example, making it easier for U.S. tech firms to source inputs from India or vice versa). The U.S.–India CEO Forum, also established in 2005, meets alongside the Commercial Dialogue. This forum allows business leaders from both countries to make recommendations – for instance, calling for reducing regulatory hurdles or improving infrastructure – which often feed into government-to-government talks.
Strategic and Economic Dialogues: At a higher level, the countries have integrated trade objectives into strategic dialogues. The U.S.–India Strategic Partnership (e.g. the 2+2 Ministerial and leadership summits) often results in joint statements supporting the goal of expanding bilateral trade and resolving disputes. In recent joint statements, leaders set ambitious targets (like doubling trade, removing impediments) and lauded the settlement of WTO disputes as clearing the way for deeper commerce. In 2023, the launch of the Initiative on Critical and Emerging Technologies (iCET) also included components on enhancing high-tech trade (such as electronics, defense tech, and space) – for example, easing export controls for defense trade and cooperation on telecom standards.
Sectoral MoUs and Understandings: Various Indian and U.S. ministries have MoUs affecting trade in specific sectors. For example, there is an Agricultural Cooperation framework under which both sides discuss sanitary and phytosanitary (SPS) issues (this helped in reopening trade in products like mangoes, pomegranates, cherries, and alfalfa hay in 2022). There are also understandings in energy (the Strategic Energy Partnership launched in 2018 covers areas like LNG gas trade, where the U.S. has become a supplier to India) and in healthcare (joint efforts on pharma regulations). While these may not always be described as “trade deals,” they often contain commitments to streamline export/import approval processes or share best practices, indirectly boosting trade flows.
In essence, by the end of 2024, the U.S.–India trade relationship was managed through continuous dialogue and piecemeal agreements rather than a single over-arching trade pact. The numerous forums and MoUs addressed specific issues (market access for particular goods, cooperation in emerging industries, etc.), laying groundwork that could eventually feed into a broader trade agreement in the future.
Tariff Structures (as of end 2024)
Because the U.S. and India lack a bilateral FTA, each side applies its MFN tariff rates on imports from the other (except where unilateral preferences like the former GSP applied). Below is a comparative summary of the tariff structures of both countries by end of 2024, highlighting average tariff levels and key product categories:
Tariff Averages: The U.S. generally has very low tariffs on most goods, whereas India’s tariffs are considerably higher on average. According to WTO data, the U.S.’s simple average MFN applied tariff was about 3.3% in 2023 (around 5.0% on agricultural products and 3.1% on non-agricultural products). India’s average applied tariff was about 17% (the highest of any major economy), with an average of 13.5% on non-agricultural goods and a much higher 39% average on agricultural goods. This disparity reflects India’s use of tariffs to protect certain industries and the U.S.’s more open market in goods trade.
Comparative Tariff Snapshot (end-2024) — U.S. vs India
Overall average for all goods
United States: about 3.3 % on average (trade-weighted ≈ 2 % for industrial goods).
India: about 17 % on average—highest among major economies.
Agricultural products
United States: roughly 5 % on average; many staple foods face 0–5 % duty. A few tariff-rate quotas push duties above 100 % on items such as sugar, dairy and tobacco.
India: roughly 39 % on average. Commonly levies 45 % on vegetable oils, 50 % on apples, walnuts and some grains; 30–60 % on dairy; and up to 150 % on alcoholic beverages. Several farm goods (e.g., poultry and pork until 2022) were effectively barred by SPS rules rather than tariffs.
Industrial goods (non-agricultural)
United States: average around 3 %. Most manufactured items enter at 0–5 %. IT/electronics covered by the WTO ITA (computers, semiconductors) are duty-free. Autos: 2.5 % on cars, but 25 % on light trucks (“chicken tax”). Textiles and apparel average about 11 %, with some items up to 16–20 %.
India: average about 13.5 %. Standard bands of 7.5 %, 10 % or 15 % apply to many manufactured goods. Autos: 60 % on passenger cars (CBU imports); motorcycles about 50 %, and 75 %+ on large-engine bikes and fully built luxury vehicles. Electronics: ITA-covered products at 0 %, but 10–20 % on other electronics (e.g., 20 % on mobile phones and telecom gear under “Make in India”). Textiles/apparel: generally 10–20 % for yarns and fabrics and ≈ 20 % for finished garments.
Chemicals and pharmaceuticals
United States: most pharmaceuticals are duty-free (under the WTO zero-for-zero pharma initiative). Chemicals typically face 0–5 % duty, though a few specialty chemicals are higher.
India: medicines and pharma usually carry a 10 % duty (even on essential drugs), with exemptions for certain life-saving products. Basic chemicals often face 7.5–10 %, but recent budgets have raised some to 15–20 % to spur domestic production.
Consumer goods and other items
United States: alcohol duties range from 0 % (spirits) to 6.3 % (still wine); beer is duty-free. Footwear faces 10–20 % on many styles. Jewelry (e.g., gold) is around 5.5 %.
India: alcohol faces 100–150 % tariffs—the highest band—serving both protectionist and revenue aims. Footwear and finished apparel see roughly 20–30 %. Gold and jewelry duties are frequently adjusted; gold imports were about 15 % in 2024.
Overall, India’s tariff profile by 2024 was characterized by higher protection on agriculture and certain finished goods, while the U.S. maintained generally low tariffs with a few protected categories (notably in apparel and light trucks). This imbalance has been a sticking point: U.S. leaders labeled India the “tariff king” in speeches, and India argued U.S. tariffs on specific products (and use of trade remedies) also hinder its exports.
Non-Tariff Trade Barriers (as of 2024)
Both nations maintained a variety of non-tariff barriers (NTBs) – policies other than tariffs that impede trade – including import restrictions, licensing requirements, standards, subsidies, and others. Below we detail the key NTBs on each side that were in place by end of 2024:
India’s Non-Tariff Barriers Affecting U.S. Trade
India has historically had a more restrictive trade regime, and the U.S. has frequently raised concerns about India’s NTBs. As of 2024, notable Indian non-tariff measures included:
Import Licensing and Bans: India maintained import licensing on certain products. For example, in 2023 India abruptly required licenses for imports of laptops and tablets (a move targeting reliance on Chinese electronics, but affecting U.S. firms as well). Some commodities like pulses (lentils, peas) have been subject to quota or temporary import bans to protect domestic farmers. Restriction on pork and poultry imports (for SPS reasons) effectively banned those products for years – the pork ban was lifted only in 2022 after U.S. pressure. India also continued to ban imports of beef (cow meat) for religious and cultural reasons. Such quantitative restrictions and prohibitions have been a significant barrier for U.S. agricultural exporters.
Standards and Quality Control Orders (QCOs): Since 2019, India dramatically increased the use of mandatory standards and technical regulations. Its Bureau of Indian Standards (BIS) issued hundreds of “Quality Control Orders” setting specific Indian standards that imports must meet. By 2025, over 700 QCOs across ~100 product categories (chemicals, electronics, toys, machinery, etc.) were in force. The U.S. complains that some of these standards are arbitrary or not aligned with international norms, making compliance difficult. For example, toys and electronics now require BIS certification and testing in India, raising costs for foreign producers. While India defends these as safety and quality measures, their sudden implementation and sometimes tight compliance deadlines were cited as non-tariff barriers by USTR.
Sanitary and Phytosanitary (SPS) Barriers: India’s SPS regulations have restricted imports of certain U.S. agricultural goods. A prominent case was India’s long-standing ban on U.S. poultry and eggs (citing avian influenza concerns) which was deemed WTO-inconsistent. Likewise, India imposes strict conditions on dairy imports – e.g. requiring that dairy products derive from cows fed a vegetarian diet – effectively barring U.S. dairy since U.S. producers cannot easily meet this religiously inspired standard. Phytosanitary rules limited imports of fruits like Washington apples (which faced requirements at one point) and pork (over fears of disease). The recent agreements to allow U.S. pork and India’s mangoes indicate progress, but SPS issues remain – e.g. Indian restrictions on GMO products hinder imports of U.S. soybeans or corn, as India has not approved most genetically engineered crops for food processing.
Local Content Requirements and “Make in India” Policies: India at times mandates local content in government procurement or incentive schemes. For instance, earlier solar power programs required using Indian-made solar cells, which the U.S. challenged at WTO. India has also pushed localization in ICT products (government tenders for electronics often favor or require local manufacturing). The “Make in India” and later “Atmanirbhar Bharat” (self-reliance) initiatives led to higher tariffs and various import-substitution measures, from defense to electronics, which foreign firms view as barriers. In some sectors, India tied market access to local production – e.g. requiring foreign telecom firms to source certain percentages locally or store data locally (see next point).
Data Localization and Digital Regulations: The U.S. considers India’s digital economy rules as trade barriers, especially for services. India’s Reserve Bank in 2018 imposed a rule that all payment system data (credit card transactions, etc.) be stored in India, affecting companies like Visa, MasterCard, and PayPal. In 2023, India enacted the Digital Personal Data Protection Act, and draft rules indicated possible requirements to mirror or localize personal data and restrictions on cross-border data flows. These measures, aimed at privacy and security, raise costs for foreign tech companies operating in India and can act as non-tariff barriers to digital trade. Additionally, India’s policies on e-commerce (such as restrictive marketplace rules that bar companies like Amazon from selling products of affiliated vendors) and preference for domestic digital payments (promoting RuPay cards and UPI over foreign card networks) were flagged by the U.S. as discriminatory.
Price Controls and Subsidies: India’s internal policies sometimes affect foreign trade. A notable example is the National Pharmaceutical Pricing Authority (NPPA) capping prices of medical devices and medicines. Price controls on products like cardiac stents and knee implants, while not an import ban, make foreign (often U.S.-made) devices less profitable and discourage their sale – an indirect barrier. Subsidy practices, especially in agriculture, also come into play. India provides input subsidies and minimum support prices to its farmers; the U.S. argues that excess stocks under India’s food subsidy program can lead to occasional export surges (e.g. sugar exports benefitting from subsidies) that distort markets. India’s past export subsidy schemes (like MEIS, a merchandise exports incentive) were ruled against at the WTO after a U.S. challenge, leading India to replace them. The new schemes (e.g. RoDTEP) aim to be WTO-compliant, but the U.S. keeps a watchful eye on any support that gives Indian exports an edge. Similarly, production-linked incentives (PLI) introduced to boost domestic manufacturing (in electronics, solar panels, autos, etc.) are essentially subsidies contingent on local output – these raise U.S. concerns as they encourage import substitution.
Customs Procedures and Other Hurdles: Importers often face complex customs procedures in India. While the situation improved with the TFA, issues like sudden changes in import policy (for example, abrupt tariff hikes or import policy shifts in annual budgets) add uncertainty. The U.S. has cited “sudden…regulatory hurdles” in India that act as barriers. Also, the lack of transparency in some Indian standards-setting, lengthy product certification processes, and differential treatment (e.g. state-level taxes or fees on outside products) are often mentioned by businesses as NTBs.
In summary, by 2024 India’s trade regime, though liberalized since the 1990s, still featured considerable non-tariff barriers. USTR’s 2023 report provided “an encyclopedic list” of such policies, including customs barriers, import curbs and licenses, high tariffs, divergent standards, and digital restrictions. The U.S. consistently pressed India to ease these barriers in trade talks.
U.S. Non-Tariff Barriers Affecting Indian Trade
The United States, while having a more open market, also had measures that India viewed as impediments to its exports. Key U.S. barriers and practices as of 2024 included:
Trade Remedy Duties: The U.S. frequently uses anti-dumping (AD) and countervailing duties (CVD) to protect its industries from unfairly priced or subsidized imports. A number of Indian products have been subject to these extra duties. For example, Indian steel pipes, chemicals, and shrimp have faced AD/CVD orders in the U.S. (Indian shrimp exporters, in particular, have had to pay duties due to findings of subsidies). These duties, often ranging from a few percent up to double digits, act as non-tariff barriers by raising the cost of specific Indian goods beyond the normal tariff. India has often raised this in WTO committees, arguing that some U.S. investigations unfairly target Indian exporters.
Section 232 National Security Tariffs: In 2018, the U.S. imposed global tariffs of 25% on steel and 10% on aluminum imports on national security grounds. India, like most countries, was hit by these tariffs (it was not initially exempted). This was a significant barrier for India’s metal exports to the U.S. and led India to retaliate (as noted earlier, India placed higher tariffs on U.S. apples, almonds, lentils, etc. in response). By 2023, as part of dispute settlement, India removed its retaliatory tariffs, and the two countries were exploring solutions to the steel/aluminum issue (the U.S. was negotiating bilateral quotas with various partners). However, until a solution (like a quota arrangement) is reached, the U.S. Section 232 tariffs remain a barrier for Indian steel/aluminum producers competing in the U.S. market.
Sanitary/Phytosanitary and Standards: The U.S. has stringent health and safety standards that sometimes blocked Indian exports. For instance, Indian mangoes were barred from U.S. entry for many years due to concerns about fruit flies; only after India set up irradiation treatment and bilateral cooperation (around 2007) were mangoes allowed in under strict quotas and protocols. Likewise, Indian pomegranates and lychees faced hurdles until agreements in 2021–2022 opened the door for them. Spices and food products from India are subject to FDA inspections and often detention if they contain pesticides or contaminants above U.S. limits. While these measures are not targeted specifically at India (they apply to all imports), Indian producers sometimes lack the capacity to meet them, effectively limiting access. Another example is pharmaceutical approvals: India is a major generic drug supplier, but FDA regulatory requirements can delay or restrict imports of Indian generics if manufacturing quality standards (cGMP) are not met – resulting in import alerts on certain Indian pharmaceutical factories (these are health measures, but from India’s perspective they restrict trade of cheaper generics).
Government Procurement and “Buy American”: The U.S. has laws like the Buy American Act and related regulations that prefer U.S.-made goods in government procurement. Since the U.S. has not extended procurement commitments to India (and India is not part of the WTO Government Procurement Agreement), Indian companies often cannot compete for U.S. federal contracts or infrastructure projects, which India views as a barrier. For example, if an Indian firm makes rail equipment or medical supplies, it might be effectively shut out of U.S. public tenders that require domestic content. This is a non-tariff barrier in the sense of market access limitation.
Visa and Services Restrictions: A significant aspect of India’s trade with the U.S. is services, especially IT services. India has long argued that U.S. immigration policies – like the H-1B visa quotas and tightening of work visa rules – act as barriers to the free flow of services trade. High skilled Indian professionals face challenges in obtaining visas to provide services in the U.S., which in turn affects Indian IT companies’ operations (they often need to send staff to client sites in the U.S.). While this is an immigration measure, India brings it up in trade discussions as an impediment to its services exports (the WTO recognizes services trade barriers too). Additionally, U.S. fees on certain visas (in past years, the U.S. significantly raised fees for H-1B and L-1 visas for large foreign employers) were seen as discriminating against Indian IT firms.
Agricultural Subsidies and Quotas: India has criticized U.S. domestic farm subsidies (for commodities like cotton, corn, soy) for distorting global prices, indirectly harming Indian farmers. And on the import side, the U.S. maintains tariff-rate quotas on sugar, dairy products, cotton and peanuts, which limit how much India (or other countries) can export to the U.S. at low tariff rates. Outside the quota, the tariffs can be prohibitively high (for example, over 100% on sugar and dairy). India, not being a free-trade partner, faces these quotas. In practical terms, India’s exports in these categories to the U.S. are small (India tends to be a net importer of sugar and dairy, for instance), but the quota system means even if India became competitive, it would run into these U.S. import limits.
Export Controls: The U.S. controls the export of sensitive dual-use technologies (like advanced electronics, aerospace, encryption software). Historically, India was subject to strict U.S. export controls (a legacy of nuclear sanctions in the past). In recent years, the U.S. eased many controls on India (e.g. granting India Strategic Trade Authorization-1 status in 2018 to facilitate high-tech exports). Still, some high-tech or defense items required export licenses, potentially delaying or complicating sales to India. While this is for national security, it can be viewed as a trade barrier for cutting-edge technology items that Indian entities seek to import.
Overall, the U.S. trade barriers are fewer in number but still significant for India in certain sectors. By end of 2024, many of the irritants were being addressed through dialogue – e.g. the WTO dispute settlements removed some barriers (India’s retaliatory tariffs gone, U.S. agreeing to discuss steel tariffs, U.S. allowing more Indian agricultural products). Both countries, in joint statements, recognized the need to tackle non-tariff barriers such as “technical barriers to trade, burdensome regulations, and subsidies” that hinder market access. In fact, in early 2025 they set up a Joint Facilitative Mechanism to address non-tariff barriers, aiming to mutually recognize standards and reduce red tape.
Conclusion
By 2024, U.S.–India trade relations were marked by the absence of a single overarching trade pact but the presence of multiple agreements and mechanisms – from WTO commitments to bilateral forums and MoUs – that together governed trade. Tariff comparisons show a clear contrast: India’s tariffs were generally much higher than U.S. tariffs, especially in agriculture, leading to U.S. calls for reductions. Meanwhile, an array of non-tariff barriers on both sides complicated the trading environment: India’s protective regulations and sudden policy changes, and U.S. measures like special tariffs and strict standards, each became topics for negotiation.
Encouragingly, the period up to 2024 saw some positive developments: the resolution of longstanding WTO disputes, market-opening steps (like India’s first-time import of U.S. pork and the U.S. acceptance of Indian fruits), and new partnerships in emerging sectors. These incremental steps, along with ongoing negotiations for a broader deal, have built momentum. Going into 2025, the U.S. and India appeared poised to deepen their trade ties further – potentially moving from this patchwork of understandings toward a more formalized trade agreement – all while addressing the tariff and non-tariff barriers that have historically separated the two democracies in trade.
Sources: USTR and trade.gov reports; WTO tariff profiles; Reuters and Press Trust of India news reports; Indian Ministry of Commerce releases; U.S. government press releases.
Trade.gov – India Trade Agreements (2024) – U.S. has no FTA with India; 2019 GSP withdrawal affected $5.6 billion of Indian exports.
Reuters – India-U.S. trade talks (Apr 2025) – Early-phase trade deal discussions and goal of $500 billion trade by 2030.
USDA Press Release (Jan 2022) – India agreed to allow U.S. pork imports for the first time, ending a longstanding ban (outcome of 2021 Trade Policy Forum).
PTI/NDTV – Sept 2023 Joint Statement – India and U.S. mutually resolved all seven outstanding WTO disputes by 2023, including settlement of poultry/pork ban case.
Business Standard – USTR National Trade Estimate 2025 highlights – India’s average applied tariff is ~17% (39% agri, 13.5% non-agri), one of the world’s highest; many specific Indian tariffs: 50% on apples/motorcycles, 60% autos, 70% rubber, 100% on raisins, 150% on alcohol.
WTO Tariff Profile 2023 – United States: simple average MFN tariff ~3.3% (agri ~5.0%, non-agri ~3.1%).
Reuters – USTR report on India’s trade barriers (Apr 2025) – Since 2019 India made many BIS standards mandatory; 700+ quality control orders across ~100 sectors now enforced, with more planned – signaling a rise in non-tariff measures.
Reuters – USTR on India’s digital policies – Highlights concerns with India’s draft data protection rules that may require data disclosure to government, restrict cross-border data transfers, and enable data localization.
Reuters – “Encyclopedic list” of barriers – USTR 2025 report flags India’s customs barriers, import curbs, licensing, and high tariffs ahead of potential U.S. tariff actions.
PTI/NDTV – India removed retaliatory tariffs – In June 2023 India lifted extra duties on U.S. products (chickpeas, lentils, almonds, walnuts, apples, etc.) that it had imposed in response to U.S. steel/aluminum tariffs, as part of dispute settlement.