U.S. President Donald Trump has indicated that the United States could be close to a trade agreement with India that would reduce tariffs and improve competitive conditions for American companies in the South Asian nation. However, he expressed skepticism about reaching a similar deal with Japan.

Trump stated that he believes India is ready to lower trade barriers for U.S. companies, potentially paving the way for an agreement and averting a 26% tariff he had previously announced but paused until July 9. He noted that India currently restricts access to its markets but suggested that a willingness to change this would lead to a deal with "much less tariffs". According to Reuters, Trump told reporters aboard Air Force One that he believed India was ready to lower barriers for US companies, which could pave the way for an agreement staving off the 26% rate he announced on April 2, before pausing it until July 9.

Treasury Secretary Scott Bessent echoed this sentiment, stating that the U.S. and India are nearing a deal to lower tariffs on American imports, which would also help India avoid sharply rising levies from the Trump administration. He told Fox News that the U.S. is "very close with India" regarding trade negotiations.

Indian officials extended their stay in Washington in an attempt to reach a trade agreement with the Trump administration and address outstanding concerns. A White House official indicated that the administration plans to prioritize trade deals with countries like India over Japan in the days leading up to the July 9 deadline. India is among over a dozen countries negotiating with the U.S. to avoid a significant increase in tariff rates on July 9, when a 90-day tariff pause is set to expire. Without a deal, India could see its "reciprocal" tariff rate rise from 10% to 27%.

Negotiations between the U.S. and India have faced hurdles due to disagreements on import duties for auto components, steel, and farm goods. Indian Foreign Minister Subrahmanyam Jaishankar acknowledged the intricate nature of the trade negotiations, expressing hope for a successful conclusion but cautioning that it depends on both parties finding common ground. He stated that there "will have to be give and take".

In May 2025, Trump said that India had offered the U.S. a trade deal proposing "no tariffs". The United States is India's largest trading partner, with bilateral trade totaling approximately $129 billion in 2024. The trade balance currently favors India, which has a $45.7 billion surplus with the U.S.