India Poised to Secure Landmark Trade Deal with US Amid Tariff Talks

India is on the verge of sealing a groundbreaking trade deal with the United States, potentially becoming the first country to sign a bilateral trade agreement (BTA) with the US and avoid steep tariffs proposed by President Donald Trump. According to US Treasury Secretary Scott Bessent, the agreement could shield India from 26% reciprocal tariffs while boosting trade between the two nations to 500 billion USD by 2030, up from 191 billion USD today.

The talks, which kicked off in February 2025, have picked up speed after Trump announced a 90-day tariff pause on April 9,which is set to end on July 8. The deal covers 19 key areas, including goods, services, and trade barriers, aiming to open markets and balance India’s 45.7 billion USD trade surplus with the US. Indian Commerce Secretary Sunil Barthwal is leading efforts, with a crucial round of discussions planned in Washington this week. Both sides hope to wrap up the first phase by September or October 2025.

Certain industries, like pharmaceuticals, semiconductors, and energy products such as oil and gas, will be exempt from the tariffs, protecting vital sectors. India is also exploring cuts to import taxes on US ethane and liquefied petroleum gas, a move that could benefit major players like Reliance Industries and help reduce the trade gap.

The US is India’s top trading partner, absorbing 18% of its goods exports. However, US Trade Representative Jamieson Greer pointed out that India’s average tariff of 17% far exceeds the US’s 3.3%, creating an uneven playing field. The BTA aims to level this out, fostering jobs and stronger economic ties.

Finance Minister Nirmala Sitharaman is optimistic, noting India’s proactive approach with the Trump administration. While a complete tariff-free deal isn’t realistic due to economic differences, both countries are working toward a fair and comprehensive agreement. As talks continue, this deal could reshape global trade patterns amid rising tariff debates.