India–US Trade Deal on Lines of Indonesia Pact
US President Donald Trump has confirmed that trade discussions with India are progressing and are being shaped along similar lines to the recently announced US–Indonesia trade agreement. The Indonesia deal includes tariff cuts, major purchases of US energy and agricultural goods, and the acquisition of American aircraft. Trump indicated that India is “working along the same line,” signaling optimism over a possible deal soon.
Key Elements of the Proposed Agreement
The US–India negotiations are reported to be focusing on several sectors, including agriculture, energy, medical devices, and automobiles. India is looking to protect its dairy and agricultural markets, while the US seeks greater market access and lower tariffs for its exports. Though no formal agreement has been signed yet, both sides appear to be aiming for a mutually beneficial framework.
The discussions come amid the US President’s broader push for bilateral trade deals with several countries, part of an effort to secure new market access for American producers before an August 1 self-imposed deadline. Trump has already concluded similar agreements with Vietnam and Indonesia, and is in talks with the UK and China.
No Immediate Tariff Threat to India
India has not been served with a formal tariff threat unlike some other nations, suggesting a diplomatic intent to resolve trade issues through negotiations rather than pressure. Officials familiar with the matter have indicated that both countries are close to finalizing a trade framework that could soon be made public.
Outlook and Implications
If the India–US trade deal is finalized, it could bring significant changes in tariff structures on goods such as US farm produce, energy supplies, and auto parts entering India, while potentially giving Indian exporters better access to the American market. However, sensitive sectors like dairy and medical devices remain sticking points.
With the August 1 deadline approaching, both sides are expected to speed up negotiations. Observers believe that a breakthrough agreement could come within weeks, aligning India with the pattern of new bilateral trade pacts being pursued by the US.
