India-US interim trade deal nearly sealed after a week of intense talks

First tranche of bilateral trade pact likely in 2-3 days to avert higher US tariffs

After nearly a week of intense negotiations, India and the United States (US) are learnt to have almost finalised an interim trade deal,  mainly focusing on tariff concessions. An announcement is expected over the next two-three days, ahead of the looming expiry of the US’s 90-day pause on country-specific reciprocal tariff deadline, people aware of the matter told Business Standard.

 

Indian officials are also closely studying the US’ trade agreement with Vietnam announced by President Donald Trump on Wednesday, especially since the South-East Asian nation is a significant regional competitor for India in manufacturing and exports.  

 

The US-Vietnam trade pact grants duty-free access for all American exports to Vietnam while Vietnamese goods entering the US will attract a 20 per cent duty, which is lower than the 46 per cent levy Trump had announced for the country as part of his reciprocal tariff announcement on April 2.

 

With the 90-day pause on US’ reciprocal tariffs ending on July 9, if a deal between both countries doesn’t materialise by then, India risks a 26 per cent tariff on all its exports to what is the country’s biggest market. 

 

Trade negotiators from India and the US are aiming to finalise an ‘early tranche’ deal as part of a broader bilateral trade agreement that was announced by Prime Minister Narendra Modi and US President Donald Trump in February.