US President Donald Trump has expressed strong confidence that the United States and India are on the verge of finalizing a trade deal with significantly reduced tariffs, aimed at making both economies more competitive. The ongoing negotiations center around a Bilateral Trade Agreement (BTA), with a critical July 9 deadline looming due to the expiration of a 90-day pause on tariff escalations imposed earlier by the Trump administration.

Key Points of The Negotiations

Deadline Pressure: If no agreement is reached by July 9, a suspended 26% reciprocal tariff on Indian exports to the US will automatically resume, adding to the existing 10% baseline tariff. Both sides are therefore working urgently to finalise at least an interim or “mini” trade deal before this date.

India’s Stance: India is taking a firm position on agricultural issues, particularly refusing to open its dairy sector to foreign competition—a politically sensitive area supporting over 80 million people. India is also resisting broad concessions on genetically modified crops and other farm goods, while seeking preferential access for its labour-intensive exports such as textiles, garments, gems and jewellery, leather goods, and select agricultural products like shrimp, oilseeds, grapes, and bananas.

US Demands: The US is pressing for lower duties on its agricultural exports, including apples, tree nuts, and genetically modified crops, and for greater access to India’s large consumer market.

Negotiation Dynamics: Talks have been extended multiple times, with India’s delegation, led by Chief Negotiator Rajesh Agrawal, remaining in Washington to bridge gaps on sensitive issues. Both sides are reportedly considering dropping the most contentious items from the immediate deal—such as dairy and GM crops for India, and certain electronics for the US—to secure an early harvest agreement, with the more difficult issues to be addressed in subsequent rounds.

Broader Ambitions: Beyond the interim deal, both countries aim to negotiate a comprehensive BTA, with the first phase targeted for completion by fall 2024. The long-term goal is to more than double bilateral trade from $191 billion to $500 billion by 2030.

Possible Outcomes

If a deal is reached, it will likely feature reduced tariffs on select goods, improved market access for both sides, and a framework for resolving more complex issues in the next negotiation phases.

If talks fail, the immediate reimplementation of the 26% tariffs would negatively impact Indian exporters and American firms, potentially escalating trade tensions.

The negotiations are at a critical juncture, with both sides seeking a win-win arrangement that avoids a tariff war, protects sensitive domestic sectors, and lays the groundwork for a much larger trade partnership in the years ahead.

Based On ANI Report