Jul 27, Kathmandu - Washington and New Delhi are on the brink of finalizing a long-awaited bilateral trade agreement, with senior American officials indicating that the deal could be signed within the next three to four months. Speaking on condition of anonymity during the sidelines of the ASEAN Foreign Ministers' Meeting, the officials revealed that negotiations between the two countries are in the final stages, with only the paperwork remaining.

Most issues have been resolved, and the primary delay is not due to unresolved bilateral disagreements but because Washington is still completing its Section 301 trade investigation process, the officials clarified. This law addresses unfair trade practices and grants the U.S. authority to impose tariffs or other retaliatory measures. It is expected that the investigation involving 60 countries will conclude within a week or two.

Once the investigation is complete, progress with India and other nations is anticipated to accelerate. The officials suggested that the agreement could be finalized within three to four months.

Both Washington and New Delhi have been engaged in prolonged negotiations to expand market access and reduce trade barriers, aiming to deepen economic ties. Meanwhile, the U.S. has proposed a new 12.5% tariff on goods produced through forced labor, targeting India and several other countries, citing concerns over trade practices.

In another development, U.S. President Donald Trump announced that generic medicines imported into the U.S. will be exempt from tariffs for the next two years starting August 1. However, after this period, tariffs are set to increase to 100%, and eventually up to 200%, potentially impacting India’s large pharmaceutical industry.

India is the world's largest exporter of generic medicines. By 2025, India is projected to export pharmaceuticals worth approximately $25.8 billion, with nearly $9.7 billion (around 38%) destined for the U.S. market. The new U.S. policies could therefore have significant repercussions on India’s pharmaceutical sector.