Ahead of the reciprocal tariffs by the US that are set to kick in from July 9, India and the US could sign a partial trade deal over the next few days, sources close to the development have indicated, adding that it could be signed at the latest by July 7.
“Some kind of a trade deal between India and the US will be announced in the next few days, if not by early July 4, with the outer limit being July 7,” said a person familiar with the development. The trade deal will not be a full-fledged deal covering all goods and services for now but will include only goods of mutual interest.
For India, this could include concessions from the US on labour-intensive exports such as textiles, leather goods and gems and jewellery. India is unlikely to give any concessions to the US in the sensitive sectors of agriculture and dairy, despite the demand from the US for market access in these areas, including for GM crops. However, India is not keen on any negotiations in this area.
But as a sweetener, India could offer sops to the US, including purchases of more oil and defence equipment such as jets from the US, sources said.
The need to clinch a trade deal with the US is essential for India given that Vietnam has clinched a trade deal with the US.
The plan to levy reciprocal tariffs by the US will kick in from July 9 after a 90-day pause. The US plans to impose a 26% tariff on Indian goods, including a 10% baseline tariff.
Discussions on a more comprehensive deal between India and the US are expected to continue and will be signed later in the year as per the timeline of fall 2025 that was agreed between US President Donald Trump and Prime Minister Narendra Modi earlier this year. The two countries are hoping to double bilateral trade to $500 billion by 2030.
