The United States and India are reportedly nearing a trade agreement, with President Trump announcing that the U.S. is "very close" to making a deal with India. This announcement comes amidst the release of tariff letters to various countries, including major Asian trading partners.

Trump stated that the U.S. has "spoken to everybody" and has already made deals with the United Kingdom and China. For countries unwilling to negotiate, they will simply receive notice of the tariffs, although adjustments could be made if justified.

The negotiations between India and the U.S. have been ongoing, with Indian officials recently in Washington for discussions. The trade deal being discussed is considered ambitious and unprecedented, potentially more so than recent U.S. agreements with the UK and Vietnam. It's expected to include substantial benefits for both sides, with concessions agreed upon by both nations. The agreement is likely to cover market access and address non-tariff barriers, potentially including digital trade aspects.

While the deal is not expected to be a comprehensive free trade agreement, it aims to be substantial, with ambitions close to that of an FTA. Sensitive sectors such as dairy and agriculture are likely to be excluded from the initial agreement. The focus will initially be on trade in goods.

The U.S. had initially imposed a 26% reciprocal tariff on Indian goods in April but temporarily suspended it for 90 days. The deadline for these tariffs was previously set for July 9, but has been extended to August 1. India is seeking a full exemption from this tariff, though a 10% baseline tariff remains in place. If no deal is reached, the higher tariffs could be implemented.

According to reports, the average tariff under the potential "mini" deal is expected to be around 10%. This agreement could pave the way for broader trade discussions in the future. Some reports suggest that the two countries were expected to make a final decision on the mini-trade deal within 24 to 48 hours.

Commerce Minister Piyush Goyal stated that India will only accept a trade deal that is fully finalized, properly concluded, and in the national interest, regardless of deadlines.

Mark Linscott, former assistant U.S. Trade Representative for South Asia, noted the U.S. appreciates India's position on agriculture and that the deal would likely not include concessions on dairy and some agricultural products like wheat. He believes it would be a mistake not to approve the deal, as it serves both U.S. and Indian interests.