In a surprising announcement from Doha, President Donald Trump stated that India has offered the United States a trade deal that would essentially eliminate tariffs on a wide range of American goods. This development comes after a period of fluctuating trade relations between the two countries and hints at a potential breakthrough in ongoing negotiations.
"India offered US a deal, basically zero tariffs," Trump said during his West Asia tour, signaling possible progress in trade discussions between Washington and New Delhi. However, details regarding the specifics of the proposal remain unclear, as Trump did not elaborate on the scope of the offer. There has been no immediate response from New Delhi, leaving unanswered questions about whether the deal would apply to all categories of American exports or only selected sectors.
This announcement follows Trump's earlier remarks in Michigan, where he noted that tariff talks with India were "going great" and suggested a possible deal was on the horizon. These comments were made alongside the unveiling of a new executive order focused on the U.S. auto industry.
The U.S. had previously suspended additional tariffs on Indian exports for 90 days, starting from April 10 and extending to July 9, indicating a willingness to allow negotiations to progress. This followed Trump's decision on April 2 to impose tariffs on imports from nearly 60 countries, including a 26% levy on Indian goods like shrimp and steel. This aggressive tariff strategy was aimed at reducing the U.S. trade deficit and bolstering domestic manufacturing.
The evolving trade relationship between the U.S. and India is occurring against the backdrop of a broader effort to strengthen economic ties. The United States is India's primary trading partner, with total bilateral trade reaching approximately $129 billion in 2024. However, the U.S. has expressed concerns about the trade imbalance, running a $45.7 billion goods trade deficit with India in 2024.
In February 2025, both countries announced plans to negotiate a mutually beneficial Bilateral Trade Agreement (BTA) with the goal of increasing market access, reducing tariff and non-tariff barriers, and deepening supply chain integration. The aim is to finalize the first phase of the agreement by the fall of 2025.
This potential "zero tariff" deal with India surfaces amidst other significant trade developments involving the U.S. Recently, the U.S. and China agreed to reduce tariffs on each other's goods following negotiations in Switzerland. U.S. levies on Chinese goods will decrease from 145% to 30% for 90 days, while Chinese levies will fall from 125% to 10% on American goods. Furthermore, the U.S. has also shown a willingness to negotiate a trade deal with the European Union, signaling a potential easing of trade tensions.
The U.S. currently has free trade agreements in force with 20 countries. These agreements aim to eliminate barriers to trade and investment, promoting economic growth and cooperation.
If the "zero tariff" deal comes to fruition, it could significantly reshape the economic landscape between the U.S. and India. A comprehensive trade agreement could unlock economic opportunities, enhance supply chains, and foster innovation. It could also strengthen the strategic partnership between the two countries, particularly amid ongoing tensions with China.
