US VP JD Vance and PM Modi announce 'Terms of Reference' for a bilateral trade agreement

Indian Prime Minister Narendra Modi and US Vice President JD Vance announced the Terms of Reference for a Bilateral Trade Agreement, the Office of the United States Trade Representative said in a fact sheet published on Monday (Apr 21) as it shared other details. 

Vance met with PM Modi after a red carpet welcome in New Delhi on Monday (Apr 21) as India bids for an early trade deal against massive tariffs. 

PM Modi's office said that there had been "significant progress in the negotiations" with the two countries negotiating the first tranche of a trade deal as India looks to secure relief within the 90-day pause on steep tariffs. 

Similarly, Vance's office reported "significant progress" in the talks and said the two men had established a roadmap for how economic discussions would proceed. 

Meanwhile, the fact sheet by USTR states that the latest announcement elevates significant work done since PM Modi's this year's visit to the US in February. During his visit, PM Modi met with President Donald Trump, and the two agreed to launch negotiations for a bilateral trade agreement. 

During that visit, the "US-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century" was launched.

USTR, an agency responsible for developing and promoting US foreign trade policies, noted that the goals of this initiative are to drive transformative change across key pillars of cooperation and commit to a results-driven agenda with initial outcomes this year to demonstrate the level of trust for a mutually beneficial partnership. 

It added that the Terms of Reference announced today by Vance establish a roadmap for mutually beneficial, multi-sector Bilateral Trade Agreement negotiations. 

USTR mentioned that the goals for the US include increasing market access, reducing tariff and non-tariff barriers, and negotiating a robust set of additional commitments to ensure long-term benefits. 

The document said that the US ran a $45.7 billion goods trade deficit with India in 2024, a 5.1% ($2.2 billion) increase over 2023. 

The US welcomed the tariff reductions India implemented during PM Modi's meeting with Trump in February. It also mentioned India's willingness to further reduce tariffs on US products as part of the BTA.