A team of Indian government official went to the United States on 11th of July for trade talks as the two countries try to iron out their differences over trade tariffs on a range of products including auto parts, steel and agricultural products.
A team of Indian officials who recently made an extended visit to the US to promote a comprehensive BTA (Bilateral Trade Agreement), aimed at concluding it before July 9, failed to secure a deal as the two countries could not overcome some key hurdles. India is resisting the opening of its agriculture and dairy sectors and is seeking favorable tariffs on its products entering the US compared to countries like Vietnam and China.
“We are in the middle – I hope more than the middle – of a very complex trade negotiation. Obviously, my hope is that we can bring it to a successful conclusion. I can’t guarantee it because there is another party to this discussion,” Indian Foreign Minister Subramanyam Jaishankar said at an event in New York on Monday, July 7.
India is among the few countries still negotiating a trade deal with Washington as President Donald Trump intensifies his trade war with the threat of sharply higher global tariffs from August 1.
Last week, India’s Commerce Minister Piyush Goyal said that the country would only enter into agreements in its national interest.
This stance crystallises the country’s foreign policy motto “India first” on the basis of which Prime Minister Narendra Modi has declared that the nation not only participates in the world order but also helps shape and secure the future. “We are engaged with the US team through virtual and physical meetings”, the official said, adding that India still aims to complete the first tranche of the deal by the autumn.
“The US and India are moving closer to an agreement to reduce tariffs on US imports to the South Asian country to help India avoid the sharp increase in tariffs imposed by the Trump administration next week. We are very close with India,” Trump’s Treasury Secretary Scott Bessent told Fox News in response to a question on progress in trade negotiations.
Bessent continued that different countries have different agendas for trade deals, including Japan, which Trump complained about on Monday. But in the end, he added that
“professional trade negotiators are impressed with the offers countries are making to the U.S. There will have to be give and take for the two sides to find a middle ground. People who have been at Treasury, Commerce, USTR for 20 years say these are deals they have never seen before.”
Analysts like Arihant Capital Markets Ltd believe that the US is likely to impose relatively lower tariffs on India compared to other Asian countries if a deal is reached. Investors are not concerned in advance about Trump’s threat of superlative (200 per cent), tariffs on the pharma industry, considering it mostly a rhetorical move with no practical application immediately.
Indian officials extended their visit to Washington last week to Monday to try to reach an agreement on a trade deal with President Donald Trump’s administration and address persistent concerns on both sides, Indian government sources told Reuters.
India is one of more than a dozen countries that are actively negotiating with the Trump administration to sharply decrease tariffs after July 9 i.e., after a 90-day tariff freeze.
India could see its new ‘reciprocal’ tariff rate rise to 27% from the current 10% and the two countries’ middlemen are trying to find common ground to ensure that this does not happen.
So far, only Britain has negotiated a limited trade deal with the Trump administration, accepting 10% US tariffs on many goods, including cars, in exchange for special access for aircraft engines and British beef.
What will be the benefits of a US-India trade agreement?
First, it will achieve “the much-needed reduction of economic dependence on China.”
Through an agreement with the US, India can strengthen its “China+1” strategy in industrial production.
- Washington also wants supply chain diversification – which makes India a critical partner.
- Second, Indian exports (such as pharmaceuticals, garments, machinery, software) will benefit from tariff reductions and regulatory simplifications and there will be expanding opportunities for Indian SMEs (small and medium enterprises). The agreement may attract US investment in India, strengthening the country’s supply chain and industrial base.
- Finally, there will be a geopolitical upgrade for India as closer economic cooperation with the US will enhance India’s global role complementing their strategic alliance under QUAD (India-US-Japan-Australia).
The truth is that it is very difficult to find a capable counterweight to Trump’s expansionist mood and India has currently put in place the right conditions to act as such and even with more respect for the human factor than China does.
Perhaps if India manages to come to an agreement with the US, the e-commerce map will change and Chinese companies like Shein which are often accused of environmental pollution and poor working conditions will be replaced by Indian companies like Fab India which has certifications and promotes sustainable materials and also promotes fair wages and good working conditions.
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Staikou Dimitra writes articles for Greece’s largest Newspaper PROTO THEMA. Dimitra graduated from Law School, a profession she never practiced, and has a master’s degree in theater and is involved in writing in all its forms, books, plays, and scripts for TV series.
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