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.