India and US Set to Finalise Interim Trade Deal Before July 8 Tariff Deadline

India and the United States are on the verge of finalising an interim trade agreement, with an official announcement expected before July 8, just ahead of the looming U.S. tariff deadline. This marks a significant step in easing trade tensions and strengthening economic ties between the two nations.

The deal comes as both sides rush to avoid reciprocal tariffs imposed by the U.S. under former President Donald Trump’s trade policies. The 90-day pause on U.S. tariffs, announced on April 9, is nearing its end, putting pressure on both countries to resolve pending issues. Currently, Indian goods face a 26% tariff rate compared to 52% on U.S.-made goods.

White House Press Secretary Karoline Leavitt confirmed on Monday that the deal is set to be finalised soon, echoing Trump’s recent statements about a “very big deal” with India. Trump, after signing a trade deal with China, hinted that India is next in line for improved trade relations with the U.S.

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Key Features of the Proposed Deal:

The agreement focuses on key sectors, including agriculture, automobiles, industrial goods, and labour-intensive products.
India has managed to protect its dairy and wheat markets from foreign competition, a crucial win for the sector that employs over 80 million people.

In exchange, India has agreed to import more natural gas from the U.S. to reduce its $41.2 billion trade surplus with Washington.
Duty concessions are being negotiated for Indian exports such as textiles, gems, jewellery, leather, and certain agricultural products.

While agriculture and dairy remain sensitive topics, sources indicate that both sides have resolved the major points, paving the way for the agreement. The interim deal is expected to serve as the foundation for a more comprehensive Bilateral Trade Agreement (BTA) targeted for completion by October 2025.

Trump's Trade Stance & Market Reaction

Trump has made no secret of his aggressive trade stance, calling for the removal of all trade barriers. His administration had initially suspended the additional 26% levy on Indian imports, maintaining a 10% baseline tariff. The upcoming deal seeks to permanently resolve these tariff concerns.

Market experts suggest the interim deal will ease trade frictions, improve market access, and potentially boost exports from both countries. The Nifty 50 and Sensex have already regained ground, with investor sentiment improving as trade uncertainties diminish.

Conclusion

The imminent trade agreement between India and the U.S. is a vital milestone in enhancing bilateral ties. By addressing tariff concerns and boosting cooperation in strategic sectors, the deal sets the stage for deeper economic collaboration and offers hope for a more balanced, mutually beneficial trade relationship in the future