US-India Trade Deal Nears Finish: 3 Global Trade Shocks
The week of November 16-22, 2025, was highly significant for the Global Trade landscape, centering on India’s accelerating diplomatic efforts to resolve its high-tariff dispute with the United States and the ongoing global struggle to control the export of critical AI technology. These developments have immediate, crucial implications for Indian Exporters seeking stability and competitive pricing in the current volatile market.
1. US-India Trade Agreement First Tranche “Nearing Closure”
The most critical development this week was the official confirmation that the first, immediate phase (or ‘tranche’) of the proposed India-US Bilateral Trade Agreement (BTA) is “more or less near closure.” This announcement was made by Commerce Secretary Rajesh Agrawal on November 17, 2025.
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Focus on Tariffs: This initial tranche is primarily aimed at resolving the issue of reciprocal tariffs, specifically the steep 50% tariff levied by the US on a wide range of Indian goods following the dispute over Russian oil purchases.
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Officials confirmed that the package that can address these reciprocal tariffs “should happen sooner rather than later,” suggesting that the high duties currently crippling shipments across various sectors, including textiles, auto parts, and specialized industrial metals, are set to be substantially reduced or withdrawn.
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The Big Picture: The BTA aims to nearly triple bilateral trade from its current level of $\text{\$191}$ billion to a massive $\text{\$500}$ billion by 2030. This initial agreement is seen as a vital step in rebuilding trust and providing urgent relief to Indian exporters, many of whom saw shipments to the US fall by over $\text{37\%}$ between May and September 2025 due to the high tariff regime.
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Wider Engagement: Alongside the BTA, India and the US are also moving forward with a long-considered LPG (Liquefied Petroleum Gas) supply arrangement, which, while separate from the tariff talks, is designed to help maintain the overall trade balance between the two countries.
2. 🤖 US Tightens AI Export Controls: The Nvidia Case
The US government significantly amplified its focus on controlling the export of cutting-edge technology, particularly Artificial Intelligence (AI) chips, to nations deemed sensitive.
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Criminal Charges: The Department of Justice (DOJ) announced on November 19, 2025, that it had arrested and charged two US citizens and two Chinese nationals for a conspiracy to illegally export highly restricted Nvidia AI chips (like the A100, H100, and H200 GPUs) to China via intermediate countries like Malaysia and Thailand.
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National Security Focus: The case highlights the strategic importance of AI and supercomputing technology, which the US aims to prevent from aiding the military and technological advancements of its geopolitical rivals. Lawmakers are now urging even stricter chip-tracking legislation to prevent circumvention.
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Relevance to Global Trade: For Indian manufacturers and technology companies, this aggressive enforcement underlines the global shift towards treating advanced technology as a national security issue, necessitating rigorous compliance with US export regulations, even when dealing with legitimate supply chains.
3. ⚖️ EU-CPTPP Coalition Signals WTO Reform Push
In a significant diplomatic move aimed at preserving the global rules-based trading system, the European Union (EU) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) bloc formed a new coalition.
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Joint Statement: On November 20, 2025, trade ministers from the two blocs met and issued a joint statement that obliquely criticized the economic coercion and market distorting practices (referencing the US and China without naming them) that undermine global trade stability.
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WTO Reform: The primary goal of the coalition is to signal strong support for reforming the World Trade Organization (WTO), including work on updating subsidy rules and addressing the non-functioning dispute settlement mechanism.
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India’s Position: This coalition building reinforces the earlier call by the WTO Director-General for India to take the lead in global trade reforms , given India’s neutral political standing and strong economic growth. The growing fragmentation of global trade makes India’s role as a reformer and stabilizing economic power more crucial than ever.
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