India’s Foreign Minister S. Jaishankar expressed optimism about reaching a trade agreement with the United States before the 90-day pause on reciprocal tariffs concludes on July 9. The two countries began their negotiations well before US President Donald Trump first floated tariffs on his country’s global trading partners. This announcement was made on April 2. The deadline increases the pressure on Russia and China to further plug the deepening trade gap and mend increasingly fragile bilateral ties.
Over the past year, the US has added tariffs, as high as 27%, on a variety of Indian imports. In turn, India has moved to reduce tariffs on a number of American goods – news that was music to the ears of Bourbon whiskey and motorcycle manufacturers. And yet, the US continues to face a troublesome, $45 billion trade deficit with India. This odd circumstance has recently led Trump to call for reductions within this imbalance.
As Jaishankar himself was keen to emphasise, any eventual trade deal cannot be one-sided. “Nothing is agreed until everything is agreed.” He emphasized the need for collaboration and mutual respect between both countries as they work through these talks.
In the lead up to negotiations, US Commerce Secretary Howard Lutnick went on record with his optimism that the US could secure a positive deal. Reports from an unnamed Indian official indicated that recent talks held in closed-door meetings with US trade representatives in Delhi had been productive.
Yet, attacks have arisen about the Verifiable public versus private claim specifics veracity of certain claims trump down. The US President claimed that India had promised to remove all tariffs on US goods. This claim has been widely disputed by Indian officials. Jaishankar underscored that India’s approach to the negotiations reflects a desire for reciprocity, stating, “looking at things from the perspective of its immediate interest and seeking benefits for itself” is not conducive to a fair agreement.
These hurdles notwithstanding, both leaders have continued to reiterate their commitment to improving bilateral trade. Both Trump and Indian Prime Minister Narendra Modi have set ambitious targets. They expect to increase trade between their two countries more than twice over, aiming for an astronomical $500 billion. As the experts point out, India is likely to be loath to make trade-offs in politically fraught areas like agriculture.
Historically, the US was India’s largest trading partner, with bilateral trade hitting a record high of $190 billion. As talks go on, both countries are working to reach equilibrium that will meet each country’s economic priorities.