US-India Trade Agreement Talks Brace for Trump Tariff Showdown

US-India Trade Agreement Talks Brace for Trump Tariff Showdown
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US Delegation Visits India for Crucial Trade Agreement Talks

Between June 5 and 6, 2025, New Delhi is set to witness the arrival of the high-level delegation from the United States, with which talks are to be held, within two days, regarding the actualization of a Bilateral Trade Agreement (BTA) with India. The occasion is extremely crucial in forging economic relations between the two countries, which set an ambitious target for achieving bilateral trade of USD 500 billion by the year 2030-discussed as Mission 500.

Fruitful Talks Pave Way for First BTA Tranche Ahead of Looming Tariff Deadline

The forthcoming discussions are scheduled to happen after a series of highly productive interactions, including the meetings that occurred in Washington, D.C., on the side of the Department of Commerce of India, with the Office of US Trade Representative, during April 23-25, 2025.

Both sides have offered full satisfaction regarding the positive momentum in negotiations, with India calling the discussions "fruitful." For those familiar with the negotiations, the source indicated that India and the US are on track to signing the first tranche of this much-awaited BTA before July.

There is a sense of urgency with July 8 approaching fast: the date when President Donald Trump announced a 90-day suspension for reciprocal tariffs is set to expire. India is purportedly seeking full exemption from these tariffs should they be imposed.

Tariff Divisions: US Pushes for Market Access as India Guards Agricultural Sector

The range of bilateral trade discussions is quite thorough, being held over an array of issues, both tariff and non-tariff in nature. The US is eager to pursue tariff cuts for sectors comprising industrial goods, automobiles, wines, petrochemical products, dairy, and agricultural products that consist of apples and tree nuts. Meanwhile, India seeks reductions in duties in labor-intensive industries such as textiles, gems and jewelry, leather goods, garments, plastics, chemicals, and certain agricultural items, shrimp, and bananas. 

One of the most sensitive areas for India continues to be agriculture, which the US has sought to come to terms with. On the contrary, India has henceforth been unwilling to consider dairy and agriculture within the scope of trade negotiations due to domestic concerns and food security objectives.

The Terming of Trump's Tariffs and India's Wariness

A prominent event that shapes the embers of new negotiations has been a US court order that has declared unlawful the reciprocal tariffs imposed by President Donald Trump. If anything, this decision provides some relief, but Indian think tanks such as the Global Trade Research Initiative (GTRI) have proposed caution.

GTRI founder Ajay Srivastava has stated that India must "resist any agreement shaped by threats or based on unlawful measures," bringing to attention how these Trump-era tariffs are in violation of both WTO rulings and US domestic law. This layer of legal uncertainty may force India to rethink its negotiating strategy.

Commerce Minister Piyush Goyal remains hopeful of an ongoing BTA dialogue where India continues to be "well on track" and "in fast progress." The potential of a full-fledged trade agreement, meanwhile, has been viewed as a landmark that may open fresh avenues of trade and investment, further supporting the strategic partnership between India and the United States.

With an eye on the forthcoming visit of the US side, emphasis will be laid on finding solutions to some of the more challenging trade-related issues around which the economic futures of the two countries coalesce.

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