In a significant development for global trade, U.S. President Donald Trump on Friday alluded to a forthcoming “very big” trade agreement with India, while addressing the “Big Beautiful Bill” event. His remarks came shortly after the U.S. signed a substantial trade deal with China.
“We are having some great deals. We have one coming up, maybe with India. A very big one. We’re going to open up India. In the China deal, we are starting to open up China,” Trump said, signaling momentum in trade negotiations with another key Asian economy.
Meanwhile, a senior Indian delegation led by Chief Negotiator Rajesh Agarwal—who also serves as Special Secretary in the Department of Commerce—arrived in Washington for a fresh round of discussions with their American counterparts. According to official sources cited by news agency PTI, both sides are working to finalise the agreement before a July 9 deadline.
High Tariffs and Trade Barriers
On April 2, the U.S. imposed an additional 26% reciprocal tariff on select Indian goods, though the new tariffs were suspended for 90 days, pending the outcome of negotiations. However, a 10% baseline tariff remains in effect.
India is seeking full exemption from the additional tariff, while the U.S. is pushing for greater market access in sensitive sectors such as industrial goods, automobiles (particularly electric vehicles), wine, petrochemical products, and agricultural commodities including apples, tree nuts, dairy, and genetically modified crops.
India, in turn, is requesting tariff concessions for its labour-intensive export sectors, such as textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oilseeds, grapes, and bananas.
Agriculture and dairy remain particularly sensitive sectors for India, which has so far refrained from opening them up in any of its free trade agreements.
Interim Deal and Long-Term Goals
Officials from both countries are currently aiming to finalise an interim trade pact, with a view toward concluding the first tranche of a broader bilateral trade agreement (BTA) by fall 2025. The long-term goal is to more than double bilateral trade—from the current level of USD 191 billion to USD 500 billion by 2030.
A source familiar with the negotiations told PTI that if the July 9 deadline is not met, the suspended U.S. tariffs would revert to the full 26% announced on April 2.
India’s exports to the U.S. reached USD 17.25 billion during April–May 2025, up from USD 14.17 billion in the same period last year—indicating that the initial tariff increases had a limited impact.
Momentum from Both Sides
Earlier this month, U.S. Secretary of Commerce Howard Lutnick expressed optimism during remarks at the U.S.-India Strategic Partnership Forum, stating that a mutually beneficial agreement could soon be within reach. “You should expect a deal between the United States and India in the not-too-distant future,” he said, highlighting growing alignment on key issues.
On June 10, India’s Minister of Commerce and Industry, Piyush Goyal, confirmed that both nations are actively working toward a fair and balanced trade agreement. Speaking at a press conference, Goyal said, “Prime Minister Narendra Modi and President Trump met in February 2025. Both leaders have agreed to pursue a bilateral trade deal that is equitable, mutually beneficial, and aligned with the interests of businesses and citizens in both countries.”
Describing India and the U.S. as “very close friends, allies, and strategic partners,” Goyal emphasized that the trade deal presents a critical opportunity to expand economic cooperation and reinforce the strategic relationship between the two democracies.
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