The United States and India are potentially on the verge of a "very big" trade deal, according to recent statements by President Donald Trump. These pronouncements have come after a period of intense negotiations between the two countries, signaling a possible breakthrough in long-awaited bilateral trade relations.

Trump's statement indicates a desire to "open up India" for trade, mirroring similar efforts with China. He highlighted that such developments "never really could have happened" previously, emphasizing the potential significance of this agreement. This announcement follows weeks after negotiators from both countries engaged in closed-door talks, suggesting substantial progress has been made. An Indian team, led by chief negotiator Rajesh Agarwal, has arrived in Washington for further discussions, aiming to finalize a pact before July 9th.

The potential trade deal encompasses various sectors, with both nations viewing it as a crucial step toward an enhanced economic partnership. Sectors likely to be affected include agriculture, with potential increases in imports of U.S. items like walnuts, pistachios, and cranberries. However, India's resistance to broad agricultural access remains a point of consideration. The deal is also expected to lower tariffs, enhancing the competitiveness of U.S. products in India, particularly in the energy, agriculture, defense, and aviation sectors. Given India's relatively higher average tariffs, the agreement could particularly benefit American exporters.

Both countries are working towards a mutually beneficial agreement. India seeks duty concessions for labor-intensive sectors such as textiles, gems and jewelry, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas. The U.S., on the other hand, desires duty concessions on certain industrial goods, automobiles (especially electric vehicles), wines, petrochemical products, dairy, and agricultural items like apples, tree nuts, and genetically modified crops.

The goal is to increase bilateral trade from the current $191 billion to $500 billion by 2030. To achieve this, discussions have focused on expanding market access for industrial and agricultural goods, reducing tariffs, and addressing non-tariff barriers.

While the U.S. had implemented a 26% reciprocal tariff on Indian products in April 2025, it was suspended for 90 days from April 10, maintaining a 10% basic duty. India seeks a complete exemption from these retaliatory tariffs, and a provisional agreement might be reached before July 9.

Some analysis suggests that while U.S. imports to India might increase under the agreement, Indian exports may see limited benefits, as many key exports already have duty-free access to the U.S. market. Despite this, the agreement is viewed as an opportunity to expand bilateral trade and strengthen the strategic partnership between the two countries. Both countries aim to create a fair, equitable, and balanced agreement that promotes business.