India and the United States are edging closer to finalizing an interim trade deal. With negotiations accelerating in New Delhi ahead of a key July deadline, both sides are eager to use this agreement as a stepping stone toward a broader Bilateral Trade Agreement (BTA), with an ambitious target of reaching $500 billion in annual trade by 2030.
Key Agendas of the Trade Deal
1. Interim Tariff Reductions
The proposed deal includes phased tariff reductions across major sectors like agriculture, textiles, and automobiles. India is considering lowering average tariffs to around 10%, with near-zero tariffs on a select set of goods. In exchange, the U.S. is seeking better access to India’s markets, particularly in agricultural products such as dairy and corn used for ethanol production.
2. Sector-Specific Concessions
India may offer duty cuts in labor-intensive industries such as leather, textiles, and jewelry. The U.S. is pushing for reductions on its exports like petrochemicals, medical equipment, electronics, and agricultural products such as almonds and cranberries.
3. Exclusion of Sensitive Issues
To maintain negotiation momentum, both nations have agreed to temporarily set aside contentious issues such as immigration policies and intellectual property rights. This mirrors the modular negotiation strategy seen in India’s other recent trade pacts, like those with the UAE and EFTA.
Concessions and Strategic Considerations
-
India’s Agricultural Safeguards
India remains protective of its agricultural and dairy sectors due to political sensitivities and domestic economic concerns. Organizations such as the Swadeshi Jagran Manch have publicly urged the government to exclude these sectors from the trade talks. -
U.S. Tariff Concession Monitoring
Indian negotiators are closely observing U.S. tariff concessions extended to other countries to ensure parity and avoid any disadvantage in the final deal. -
Legal and Regulatory Hurdles
Recent U.S. court rulings on trade-related matters have introduced additional uncertainty. Indian officials are examining these rulings to assess potential impacts and formulate strategies that align with national interests.
Timeline and Future Outlook
-
Interim Agreement by June 2025
Negotiators are working towards finalizing the interim agreement by the end of June. This deal would serve as a blueprint for resolving long-standing disputes and boosting bilateral trade flows. -
Comprehensive Bilateral Trade Agreement by Fall 2025
Following the interim deal, a broader BTA is expected to be negotiated in stages. The focus will shift to enhancing mutual market access, reducing non-tariff barriers, and expanding cooperation across strategic sectors like technology and clean energy.
Mr.Mohan Shukla ,Senior Policy Advisor at MMPI ( Metals Minerals Publication of India ) and also Board Chairman at News365 Times opines India -USA trade deal may be the First part of the deal and Indian negotiators are progressing quite strategically and more importantly on the premise of strengths & stature of New India
