July Trade Talks: What's cooking for India with the US, UK, and EU
Upcoming Trade Discussions Between India and Major Economies: Examining the Implications for the Indian Economy from Three Significant FTAs in July
Get ready for some major global trade action! The calendar's turning to July, and India's in the thick of it with significant Free Trade Agreement (FTA) negotiations on the horizon. Here's a lowdown on what you can expect from these high-stakes trade talks.
India-US Interim Trade Deal: Fingers Crossed Before July 9
Things are heating up as the India-US trade talks are back in gear. With U.S President Donald Trump hinting at a "big" deal with India approaching, the stage is set for some tension-filled discussions. Leading the charge is India's chief trade negotiator Rajesh Agarwal in Washington, D.C. Both countries are working tirelessly to wrap up an interim trade deal before the 90-day tariff truce expires on July 9, 2025. The clock is ticking, and neither side wants to see fresh U.S tariffs on Indian goods, which could trigger a 10 percent additional duty on Indian exports.
The talks got rocky as both sides couldn't seem to find common ground on import duties on steel, auto parts, and agricultural products, according to a Reuters report.
With the U.S pressure on India to reduce tariffs on soybeans, corn, dairy products, alcoholic beverages, and automobiles, the elephant in the room remains – can India meet the U.S demands without substantial concessions in return?
India, however, is holding its ground by advocating for zero tariffs on steel and other key exports, as well as pushing for greater access for its labor-intensive sectors like textiles, leather, gems and jewelry, chemicals, plastics, and seafood.
India-UK FTA: Time for a Drink and a Dance by End of July
The wait is nearly over – India and the UK are getting closer to closing a long-awaited FTA by the end of July. The negotiations have been on and off for over three years, and while the majority of chapters have been finalized, there are still some key issues under discussion, particularly regarding rules of origin and auto sector concessions.
Once signed, the FTA will erase tariffs on various Indian exports, with a special focus on labor-intensive goods such as leather, footwear, and clothing. Import duties on British goods like whisky and cars will also receive a much-needed reduction. India aims to double bilateral trade to an impressive $120 billion by 2030 through this deal.
India-EU FTA: Lightening the Load in Brussels
It's a go for the next round of India-EU FTA talks in Brussels this July! The two parties plan to accelerate their negotiations, addressing key areas like market access for goods and services, investment opportunities, rules of origin, sanitary and phytosanitary (SPS) standards, and technical barriers to trade (TBT). Negotiations are targeting the removal of tariff and non-tariff barriers across goods, services, and investments.
The EU member states were convened in June 2022 after a 9-year break, and since then, 11 rounds of talks have taken place. The EU talks are still ongoing and are unlikely to wrap up this year. The EU member states include Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
Bolster Exports, Eliminate Tariffs, Strengthen Economic Ties: The Common Goal
India and the EU share a robust trade and investment partnership, with the EU being one of India's largest trading partners in goods, making up over $135 billion in bilateral goods trade in 2023. The EU member states have over $117 billion invested in India, and India's investments in the EU are estimated at around $40 billion.
Bilateral services trade in 2023 was valued at $53 billion, with India exporting $30 billion worth of services and importing $23 billion. Beyond the EU, India is also engaged in FTA discussions with New Zealand, Peru, and Chile, aiming to boost its global trade presence.
Sources:
- Rajesh Agarwal, India's chief trade negotiator to be in Washington amid fresh trade talks with the US (Indian Express)
- India and the European Union on the brink of a mighty Free Trade Agreement (The Diplomat)
- India-UK Trade Negotiations on Track to Conclude FTA by the End of July (Nikkei Asia)
- India Seeks to Negotiate Three More Free Trade Agreements (The Exchange)
- India-US Trade Talks Hit a Roadblock as Both Sides See Tariff Differences (Reuters)
- India's finance ministry is closely monitoring the ongoing trade talks with the US, UK, and EU, as the outcomes could significantly impact the Indian market and investment opportunities.
- As the deadline for the India-US interim trade deal approaches on July 9, 2025, defi platforms are seeing increased trading in derivatives related to potential tariff changes and their impact on the respective economies.
- The success of the India-UK FTA, expected to be finalized by the end of July, could lead to a surge in investments in the sports industry, given the UK's strong presence in sports broadcasting and event organization.
- At the same time, unpredictable weather patterns in various regions might pose a risk to the timely execution and delivery of goods, potentially affecting the overall success of the trade deals under negotiation.
