The government should negotiate for complete exemption from any unexpected future tariff increases on India’s key exports to the US like generic medicines, critical minerals and smartphones in the proposed Bilateral Trade Agreement (BTA), the parliamentary standing committee on commerce said in a report on Thursday.
Expressing concern over fast-changing tariffs on Indian exports, the committee has recommended that the BTA be concluded at the earliest so that businesses on both sides can benefit from a stable and predictable trade environment.
To shield vulnerable small-scale industries from volatile tariff actions, the department of commerce must actively deploy localised financial buffers and export credit assistance programmes, the committee said. Since both sides decided to negotiate BTA, India goods has faced tariffs starting with 10% in April 2025 and going up to 50% in August before coming back down to 10%.
The report on the review of India-US trade relations presented in Parliament on Thursday also asked the department of commerce to prepare a time-bound road map to achieve the objectives of the Mission 500 that the both countries had agreed to when President Donald Trump and Prime Minister Narendra Modi met in Washington in February 2025. Under the plan both countries have agreed to increase bilateral trade to $500 billion by 2030 from $200 billion at present.
One of the drivers of this trade growth was BTA, which both countries had agreed to finalise by the autumn of 2025. However, talks are still continuing though both sides have agreed to a framework of an interim trade agreement by February.
To ensure comprehensive implementation of Mission 500 the committee had said that the the road map must explicitly focus on the strategic utilisation of domestic Production Linked Incentive (PLI) schemes to enhance export infrastructure and scale cost competitiveness against global supply shocks.
Concurrently, priority must be given to fast-tracking Mutual Recognition Agreements (MRAs) for professional services, pharmaceuticals and agricultural standards to prevent arbitrary technical barriers to trade (TBT) at US ports.
The committee has also suggested establishing an institutional mechanism to routinely review currency volatilities and logistics challenges is imperative to cushion MSME-led export sectors from sudden regulatory shifts.
The department should identify sectors where India’s exports can grow further in the US market. At the same time, efforts should be made to encourage greater US investment in India’s manufacturing, research and technology sector through FDI to promote made in India products, the committee said.
The committee is of the view that the trade surplus with the US should be sustained and for this it also recommended the Department to design a targeted strategy to boost high-value knowledge exports such as artificial intelligence, digital health and engineering research to maintain India’s long-term competitive edge in services.
The department should actively leverage global “friend-shoring” trends to deeply integrate Indian manufacturers into critical United States supply chains, particularly in electronics, semiconductors and clean energy, the report said.