U.S.-India tentative trade agreement potentially established prior to June 25th.
Upcoming Interim Trade Deal between India and the US
India and the United States are progressing towards finalizing an interim trade deal by June 25, reportedly before the tariff deadline on July 8. This interim agreement is believed to serve as a precursor to a broader, comprehensive bilateral trade pact.
Scheduled talks between US negotiators and their Indian counterparts are slated for early next month, as discussions continue on key sectors and tariff adjustments.
The proposed interim deal focuses on improving market access by easing tariffs on critical exports. Notably, there is significance for India in obtaining greater access to US markets for exports such as textiles, grapes, and leather products. Meanwhile, the US seeks tariff reductions on certain industrial goods, auto parts (including electric vehicles), and agricultural items such as apples and tree nuts.
Currently, Indian exports to the US face a 10% baseline tariff. In April, the US introduced a 26% reciprocal tariff on certain Indian goods, which has since been suspended until July 9. The interim deal aims to revisit these tariffs and possibly lower them for specific sectors.
New Delhi is advocating for complete exemption from the 26% reciprocal tariff on Indian goods and further expanding duty-free access or securing more favorable concessions for its exports. On the other hand, the US appears willing to lower tariffs to 10% or less for eligible nations, but a zero-tariff scenario across all sectors remains unlikely.
The ultimate goal is to double the bilateral trade value to $500 billion by 2030. This interim deal is viewed as crucial for establishing a stable trade relationship and paving the way for deeper economic integration between the two economies.
The upcoming interim trade deal might have implications for other sectors beyond general-news topics like trade, as it could potentially impact the finances of industries involved in critical exports such as textiles, grapes, and leather products. The sports industry could also be affected, especially the electric vehicle sector, given the US's interest in tariff reductions on auto parts, including electric vehicles.
Moreover, the defi (decentralized finance) market may find interested parties in this interim deal, as the reduced tariffs could lead to increased foreign investment in various sectors, potentially boosting economic growth.
Lastly, the interim trade deal, if successful, could set a precedent for bilateral trade agreements, potentially influencing the general-news narrative regarding future economic relationships between countries.
