India-US Trade Deal: Key Updates on Ongoing Negotiations
Last Updated: July 7, 2025, 21:51 IST
According to sources reported by CNBC-TV18, India and the United States are expected to finalize a mini-trade deal within the next day or two.
The proposed mini-deal is set to feature an average tariff rate of around 10%. Following this agreement, discussions will likely commence on a more comprehensive Bilateral Trade Agreement (BTA) after July 9, which marks the end of a 90-day pause on tariffs announced by former President Donald Trump.
This mini-trade deal may establish annual quotas that would allow for lower tariffs on certain labor-intensive goods from India. Additionally, some American agricultural products like pecan nuts and blueberries could benefit from reduced tax rates.
Timeline of India-US Trade Discussions:
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April 2: Trump introduces a 10% baseline tariff on most imports, labeling this action “Liberation Day.” He also indicates that a second wave of tariffs (up to 27%) will target countries perceived to maintain “unfair trade barriers,” including India, beginning April 9.
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April 5: The first wave of tariffs takes effect.
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Immediate Response: India initiates negotiations, proposing tariff reductions on select U.S. products such as motorcycles, whiskey, and IT hardware, while maintaining protections for sensitive sectors like dairy.
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April Negotiations: India and the U.S. establish a framework for negotiations focusing on tariff reductions and market access, while excluding immigration and intellectual property rights issues.
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April 9: Trump announces a 90-day suspension on implementing higher tariffs, easing pressure on India and other nations.
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Late May: Commerce Minister Piyush Goyal engages in talks in Washington, aiming for a “mini-deal” by early July to avoid the higher tariffs.
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June: Negotiations progress, with both sides exchanging legal documents. However, some issues remain unresolved, such as rules of origin and compliance.
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July 1: External Affairs Minister S. Jaishankar emphasizes the need for compromise, particularly regarding dairy and rice.
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July 6: Trump extends the tariff deadline to August 1, acknowledging India’s negotiation efforts.
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July 7: High-level discussions continue, with U.S. Treasury Secretary indicating that the deal is close. The financial markets react positively in anticipation.
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July 7: Trump announces plans to send the first set of tariff letters to various countries, and warns that nations aligning with the BRICS bloc, which includes India, may face an additional 10% tariff.
As negotiations continue, both nations appear committed to reaching an agreement that balances trade interests and economic sensitivities.
