India and the United States are reportedly in the final stages of negotiating an interim trade deal, with the possibility of a formal announcement soon. Sources suggest that if all outstanding matters are resolved, the agreement could be revealed before July 9, 2025. This date is significant as it marks the end of a 90-day suspension of tariffs imposed by the United States on April 2, which affected numerous countries, including India.
Negotiations for a comprehensive bilateral trade agreement (BTA) have been ongoing since February 2025, with both nations aiming to finalize the first phase by the autumn. In the interim, this trade arrangement is intended to provide immediate benefits and pave the way for deeper economic cooperation.
India has clearly defined its "red lines" in the negotiations, particularly concerning the agricultural and dairy sectors. While details of these specific demands remain undisclosed, it signals India's intent to protect its domestic industries. Commerce Minister Piyush Goyal has emphasized that India will only proceed with the trade deal if it aligns with national interests and is completely finalized. He also stated that India's approach to trade agreements is not driven by deadlines.
The United States had implemented an additional 26% reciprocal tariff on Indian products on April 2, 2025, but temporarily suspended it for 90 days. While this suspension is in effect, a 10% baseline tariff imposed by the U.S. remains active. India is seeking a complete exemption from the 26% tariff, and failure to reach an agreement could result in its reinstatement.
Despite these challenges, the economic ties between India and the U.S. have been growing stronger. The United States has been India's largest trading partner since 2021-22. Bilateral trade in goods reached $131.84 billion in 2024-25, with India exporting $86.51 billion worth of goods and importing $45.33 billion, resulting in a trade surplus of $41.18 billion. In the April-May period of the current fiscal year, India's merchandise exports to the United States increased by 21.78 percent, reaching $17.25 billion. Similarly, imports grew by 25.8 percent to $8.87 billion. The two-way trade in services has also expanded, growing from $54.1 billion in 2018 to approximately $70.5 billion in 2024. Both countries aim to increase bilateral trade to $500 billion by 2030.
Amidst ongoing trade tensions between the U.S. and China, and new tariffs imposed on 14 other countries, India appears to be a key partner for the United States. U.S. President Donald Trump stated that the U.S. is close to signing a trade deal with India.
