US-India Trade Agreement Prospects
Following the recent trade agreement with China, US President Donald Trump has indicated the potential for a "very big" trade deal with India. This announcement was made during a White House event, as a trade delegation from India is currently in Washington DC to advance talks.
Current Trade Negotiations
- The ongoing discussions are critical as the 90-day pause on US-imposed reciprocal tariffs is approaching its July 9 deadline.
- Both nations aim to finalize the initial phase of a broader bilateral trade agreement (BTA) announced earlier in February.
US Tariffs and Negotiation Stance
- The Trump administration had initially imposed a 26% reciprocal tariff on India but paused it for 90 days to allow negotiation.
- White House spokesperson Karoline Leavitt mentioned a possible extension of the deadline but emphasized the president's discretion in setting favorable tariffs.
Future Trade Agreements
- Treasury Secretary Scott Bessent suggested that the broader trade agreement agenda could conclude by Labor Day, September 1, 2025.
- Commerce Secretary Howard Lutnick indicated plans to secure deals with 10 major trading partners.
Key Points of Negotiation with India
- The initial phase may involve tariff reductions and addressing non-tariff barriers for exporters from both countries.
- The US seeks relaxation of India's quality control norms and access to the Indian agriculture sector.
- India advocates for exemption from the proposed 26% reciprocal tariff and the existing 10% universal tariff.
India's Stance and Strategic Considerations
- India remains optimistic yet cautious, not rushing to conclude the initial trade deal by the impending deadline.
- The Global Trade Research Initiative (GTRI) emphasizes the importance of a reciprocal, balanced, and transparent agreement.
- Any agreement must protect Indian interests such as farmers, the digital ecosystem, and sovereign regulatory rights, avoiding politically driven or one-sided deals.
