India and the United States have agreed on a road map for a trade deal in a move that is expected to defuse tensions over looming tariffs and reposition New Delhi as a key partner in Washington’s strategy to counter China’s influence. The announcement came hours after US Vice-President JD Vance met Indian Prime Minister Narendra Modi in New Delhi on Monday. In a statement, US Trade Representative Jamieson Greer confirmed both sides had finalised the terms of reference for negotiations aimed at achieving “reciprocal trade”. “There is a serious lack of reciprocity in the trade relationship with India. These ongoing talks will help achieve balance and reciprocity by opening new markets for American goods and addressing unfair practices that harm American workers,” he said. “India’s constructive engagement so far has been welcomed, and I look forward to creating new opportunities for workers, farmers, and entrepreneurs in both countries,” Greer added. India’s external affairs ministry said in a statement that Modi and Vance noted “significant progress” in bilateral trade negotiations. Vance said in a post on X that he “looked forward to strengthening our relationship with India”. Officials in New Delhi are hoping that the bilateral trade relationship will improve after the US imposed a 26 per cent tariff on Indian imports in early April as part of a broader move by Washington targeting countries with which it has significant trade deficits. Trump later paused the reciprocal tariffs for 90 days but retained a baseline 10 per cent levy for global imports. “I think Vance’s visit will fast track the trade deal on which officials from both sides are working,” said Uday Chandra, an assistant professor at Georgetown University. “Trump is due [to visit India] later in the year for the Quad summit. I expect the deal to be done and dusted by then.” During a visit to the US in February, Modi invited Trump to attend a meeting of the Quad – a grouping comprising the US, India, Australia and Japan – to be held in Delhi in September. Indian and US trade officials have been working towards a bilateral agreement since Modi’s visit, when he pledged in a joint declaration with Trump to expand two-way trade fourfold to US$500 billion by 2030. The US is India’s largest trading partner – bilateral trade rose to US$129 billion in 2024, with a US$45.7 billion surplus in favour of India, according to a Reuters report on Monday citing US government trade data. Apart from India buying more US oil and gas, it could also be offering to cut tariffs on some US imports, Chandra said. Indian executives say India is likely viewed more favourably by Washington than its regional trade rivals given that it is facing lower tariffs than the likes of Vietnam and Thailand. As such, New Delhi should strive to secure concessions from the US for its manufacturing sector as global manufacturers seek to diversify beyond their long-established supply chains in China, according to the executives. Nonetheless, the Indian government will still have to address US concerns about its deficit in the bilateral trade, analysts say. Washington has been pushing for Delhi to lower import tariffs on US products such as whiskey, automobiles and farm products. Opposition politicians and labour unions in India have raised concerns about a potential surge in US agricultural exports to the country hurting the livelihood of millions of farmers. It would be very smart of us if we want to counterbalance China to strengthen our ties to India Peter DeFazio, Congressional Progressive Caucus founder Peter DeFazio, founder and chairman of the Congressional Progressive Caucus, told This Week In Asia on Tuesday on the sidelines of the MAVEK Technology Series 2025 webinar hosted by investment bank MAVEK that Washington wanted to reach a fair deal to tackle “unfair tariffs” on American exports to India. Beyond trade, US officials were aware of India’s strategic importance and considering how Washington could counter China in that region, DeFazio added. Beijing and Washington have been embroiled in an intensifying trade war with no prospects in sight of a de-escalation. “I think it would be very smart of us if we want to counterbalance China to strengthen our ties to India,” DeFazio said.