India-US trade breakthrough on horizon as Trump pledges reduced tariffs, stronger economic cooperation
by Utsav RoyOn Tuesday, US President Donald Trump reiterated his confidence that a trade agreement between the United States and India is imminent. He emphasized that the deal would feature significantly lower tariffs, enabling fairer competition between the two nations.
“I believe a deal with India is close. But it will be a very different kind of agreement — one that allows us to compete,” Trump said. “Currently, India does not open its market to others. If that changes, we will secure a deal with considerably lower tariffs.”
India and the US have been in active negotiations over a Bilateral Trade Agreement (BTA), working against a tight July 9 deadline marking the end of a 90-day pause on tariff hikes.
Sources within the Indian government revealed that India has adopted a more assertive approach, particularly on agricultural issues, as talks enter a critical phase. Chief Trade Negotiator Rajesh Agrawal, leading India’s team, has extended his stay in Washington as negotiations, originally planned for Thursday and Friday, were prolonged in an urgent bid to finalize an interim agreement before the deadline.
The urgency stems from the potential reinstatement of a 26% retaliatory tariff, originally imposed under Trump’s administration on April 2. These duties were temporarily lifted for 90 days but will automatically return if the ongoing discussions do not result in a deal.
Agriculture remains a sticking point for India, where the majority of farmers are small-scale, subsistence cultivators. This makes any major concessions politically and economically sensitive. India has never permitted foreign access to its dairy sector in any prior trade agreements, and it appears unwilling to do so now despite American pressure.
The US is pressing for lower duties on agricultural imports such as apples, tree nuts, and genetically engineered crops. On the other hand, India is pushing for improved market access for its labor-intensive exports, including garments, gems and jewelry, leather items, and select agricultural goods like shrimp, grapes, bananas, oilseeds, and spices.
While immediate efforts focus on finalizing an interim deal, both nations are also laying the groundwork for a broader bilateral trade pact. The first phase of this agreement is expected to conclude by fall 2024, with the long-term objective of increasing bilateral trade from $191 billion to a targeted $500 billion by 2030.