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India's largest trading partner since 2021-22 has been the United States. (AI image)
India-US trade deal: Ahead of US President Donald Trump’s July 9 tariff deadline, India has drawn the red lines on a mini trade deal. According to Indian officials, the decision on the mini or interim trade deal now rests with America.Sources told PTI that should matters be resolved, an interim trade deal could be announced prior to July 9, which coincides with the conclusion of the 90-day suspension period of Trump-era tariffs announced on April 2, affecting multiple countries including India.
India-US Trade Deal: India Draws Red Lines
As negotiations continue for the proposed interim trade agreement between India and the US, India has established firm boundaries on crucial sectors including agriculture and dairy."India has drawn its red lines... now the ball is in the US court," sources told PTI.India and the US spoke of discussions for a bilateral trade agreement (BTA) in February, setting a timeline to complete the first phase by autumn (September-October) this year. Prior to this milestone, both countries are working to establish an interim trade arrangement.Also Read | India-US trade deal: 'Don't make deals based on deadlines, national interest paramount', says Piyush Goyal as Donald Trump's tariff date nearsFollowing the US implementation of an additional 26% reciprocal tariff on Indian products on April 2, which was temporarily suspended for 90 days, America's 10% baseline tariff remains active.
India seeks complete exemption from the 26% tariff."If the proposed trade talks fail, the 26 per cent tariffs will come into force again," one of the sources said.Commerce Minister Piyush Goyal emphasised last week that India's approach to trade agreements is not deadline-driven, and the country will only proceed with the US trade deal when it is completely finalised and aligns with national interests.Trade agreements can only materialise when they provide mutual advantages to both participating nations, ensuring a beneficial outcome for all parties involved, he had stressed."National interest should always be supreme. Keeping that in mind, if a deal is made then India is always ready to deal with developed countries," Goyal had said on July 4.
India-US Trade Deal Issues
- Following discussions in Washington regarding an interim trade agreement, the Indian delegation has returned. Outstanding issues remain concerning tariffs on steel, aluminium (50 per cent) and auto (25 per cent).
- India has taken a firm stance regarding duty concessions to the US on agricultural and dairy products, considering their sensitive nature. Notably, India has maintained a consistent policy of keeping its dairy sector protected in all previous trade agreements.
- The Donald Trump administration has initiated correspondence with 10-12 nations regarding reciprocal tariff rates, with plans to finalise the process by July 9.
- India awaits clarity on whether a trade agreement with Washington can be reached before the US president's tariff deadline. The specific countries involved have not been disclosed by Trump.
- The implementation of reciprocal tariffs is scheduled to commence from August 1.
- The negotiations involve potential duty adjustments, with the US seeking concessions on industrial goods, electric vehicles, wines, petrochemicals, dairy products and agricultural items including apples, tree nuts and alfalfa hay.
- India's considerations for duty reductions focus on labour-intensive industries, encompassing apparels, textiles, gems and jewellery, leather goods, plastics, chemicals, oil seeds, shrimp and horticultural products.
India-US Trade Ties
India's largest trading partner since 2021-22 has been the United States. The bilateral trade figures for 2024-25 reached $131.84 billion, comprising $86.51 billion in exports, $45.33 billion in imports, resulting in a trade surplus of $41.18 billion.In the April-May period of the current fiscal year, India's merchandise exports to the United States increased by 21.78 per cent, reaching $17.25 billion. Similarly, imports grew by 25.8 per cent to $8.87 billion. Services trade between the two nations expanded from $54.1 billion in 2018 to approximately $70.5 billion in 2024.Also Read | 'Take it or leave it': Donald Trump says US tariff letters ready for 12 countries ahead of July 9 deadline; will be sent out from...The United States represents a significant market for Indian enterprises, particularly in sectors including professional, scientific, and technical services, manufacturing, and information technology.
In terms of India's overall trade composition, the United States contributes approximately 18 per cent of total goods exports, over 6 per cent of imports, and roughly 11 per cent of bilateral trade.The United States invested $70.65 billion in India during the period from April 2000 to March 2025, positioning itself as the third most significant investor.India's primary exports to the United States in 2024 comprised pharmaceutical formulations and biologicals worth $8.1 billion, telecommunications equipment valued at $6.5 billion, precious and semi-precious stones amounting to $5.3 billion, petroleum products at $4.1 billion, precious metal jewellery including gold at $3.2 billion, cotton garments with accessories totalling $2.8 billion, and iron and steel products worth $2.7 billion.The key imports consisted of crude oil valued at $4.5 billion, petroleum products worth $3.6 billion, coal and coke at $3.4 billion, processed diamonds at $2.6 billion, electrical machinery amounting to $1.4 billion, aviation components at $1.3 billion, and gold imports worth $1.3 billion.Also Read | US plans ‘economic bunker buster’ bill: Will Donald Trump impose 500% tariff on countries importing oil from Russia? How it may impact India
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