US Trade Deal with India 8-2-25

Here's a breakdown of the current state of trade agreements between the US and India as of July 2025:

No final agreement yet, but negotiations continue

·       The US and India are actively negotiating a bilateral trade agreement (BTA), with the goal of finalizing an interim deal, possibly by September or October 2025.

·       Five rounds of talks have taken place, the most recent in Washington from July 14-18, 2025, according to Deccan Chronicle.

·       However, reports indicate that the prospect of an interim trade deal before the August 1 deadline is dim due to ongoing disagreements, particularly over agricultural and dairy products.

·       Despite this, both sides remain engaged in discussions, with virtual talks ongoing and a US delegation expected to visit India in the second half of August to continue negotiations. 

Key sticking points

·       Tariffs: India and the US are at odds over tariff reductions. India seeks relief from higher tariffs on goods like steel, aluminum, and automobiles, while the US aims for lower tariffs on agricultural products and dairy imports.

·       Market access: India is hesitant to fully open its politically sensitive agricultural and dairy sectors, a major point of contention in the talks.

·       Other areas: Negotiations also involve discussions on matters like non-market economies, Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET, and potentially genetically modified (GM) crops. 

Tariff uncertainty and deadlines

·       The August 1 deadline marks the end of a suspension period for tariffs the US had threatened to impose on various countries, including a 26% tariff on India.

·       While other countries have received formal tariff notices, India has not, offering a glimmer of hope that a deal could still be reached before the tariffs take full effect.

·       The resumption of tariffs could significantly impact sectors like gems and jewelry, according to Ajay Sahai, director general of the Federation of Indian Export Organizations.

·       India continues to prioritize its national interest in these negotiations, seeking a balanced deal that safeguards domestic priorities while enhancing export opportunities, according to India Briefing. 

Future prospects

·       Despite the current impasse, both sides express optimism that a broader agreement can be reached by September or October, according to Reuters.

·       Such a deal would aim to increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two nations, says Congress.gov.

·       The successful resolution of these trade discussions could significantly boost the already strong and growing economic partnership between the US and India. 

US trade agreements with India July 2025

Based on information available in July 2025, the United States and India are engaged in ongoing negotiations for a bilateral trade agreement (BTA), also referred to as a "mini" trade deal. The current status is that hopes for an interim deal before an August 1 deadline for US reciprocal tariffs are dim due to disagreements, particularly over tariffs on agricultural and dairy products. 

Here's a breakdown of the situation:

·       Tariff Deadlines and Negotiations: The US, under the Trump administration, imposed reciprocal tariffs on numerous countries, including India, which were initially paused. This pause was extended until August 1, 2025. India was notably excluded from formal tariff notifications sent to other countries, as President Trump indicated being close to a deal with India.

·       Sticking Points in Negotiations: India is reluctant to open its agriculture and dairy sectors to lower tariffs, while the US is seeking reduced tariffs on products like steel, aluminum, and automobiles. There are also discussions about potentially deferring these contentious issues for a later stage, after an interim deal. India is also pushing for expanded access to the US market for its labor-intensive goods, such as textiles and leather products.

·       US Delegation Visit: A US delegation is expected to visit India in the second half of August to continue negotiations.

·       India's Position: India is maintaining a firm stance, prioritizing its national interests in the trade negotiations and resisting pressure to finalize an agreement under external deadlines. Reports indicate that India has conveyed its non-negotiable points to the US, placing the onus on Washington to conclude the talks.

·       Potential Timeline: Indian officials remain hopeful that a broader trade deal might be finalized by September or October 2025. 

In essence, while the US and India continue to negotiate towards a trade agreement, significant disagreements remain, particularly concerning agricultural tariffs. The August 1 deadline for reciprocal tariffs has passed, according to Siliconindia, and it remains to be seen if an interim deal can be reached in the near future. 

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Comments

India’s nominal GDP is estimated at $4.187 trillion in 2025. Nominal per capita GDP is $2,880. Population is 1.46 billion. Average Household Income is $422/yr. India has a $28.91 billion Surplus with the US. India wants to import US oil and natural gas.

India has been a member of the BRICS Trading Group that included Brazil Russia, India, China and S Africa. This complicates things for Brazil and India and is likely to be a problem for Brazil and India to make a Deal with the US.

What is the tariff on agriculture products in India?

India's simple average tariff on agricultural imports stands at 39 per cent, while the US has just 5 per cent average trade tariff on farm produce.

In 2024, India's primary agricultural imports included edible oils, pulses, and fresh and dry fruits, with vegetable oils being the largest component. Specifically, pulses saw a significant increase in imports, potentially due to a poor domestic crop. Other notable imports included cashew nuts, fresh fruits, and spices. 

India Imports from United States was US$38.99 Billion during 2024

India has offered tariff cuts on imports of US farm products like almonds and cranberries as a further concession to the United States.

Norb Leahy, Dunwoody GA Tea Party Leader