India-US trade deal: United States is working toward an interim trade agreement with India that could reduce proposed tariffs to below 20%. This would give India a more favourable position compared to other countries in the region.
Unlike many nations, India is not expected to receive a formal tariff hike notice this week, and the agreement may be announced through an official statement, Bloomberg reported, quoting sources.
The proposed interim trade deal between the two nations would allow both the sides to continue negotiations, giving India time to address unresolved issues before a broader agreement expected later this year, the source added.
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The planned agreement is likely to set a baseline tariff of under 20%, down from the 26% initially proposed, with provisions to allow further adjustments as part of a final pact. However, the exact timeline for the interim deal remains uncertain.
If finalised, India would likely join a select group of nations that have reached trade arrangements with the Trump administration. In contrast, several other countries were hit with surprise tariff hikes of up to 50% this week, ahead of the August 1 deadline.
India is pushing for a more favourable deal than the one signed with Vietnam, which included 20% tariffs. Vietnam, caught off guard by the high rate, is now seeking a revision. So far, only the UK has officially signed trade deals with the Trump administration.
Earlier on Thursday, Trump told NBC News that he is considering imposing blanket tariffs of 15% to 20% on most trading partners who haven't yet received specific rates.
Currently, the baseline tariff for most US trade partners stands at 10%. For Asian countries, announced rates so far include 20% for Vietnam and the Philippines, and as high as 40% for Laos and Myanmar.
Despite being among the earliest to initiate trade discussions this year, India-US relations have shown recent tensions.
While Trump indicates an imminent agreement, he has also suggested additional tariffs regarding India's BRICS membership.
An Indian negotiation team is also expected to visit Washington soon to push forward trade talks. India has already made its final offer to the Trump administration and outlined its non-negotiable positions.
The key sticking points remain, including the US demand for India to allow genetically modified (GM) crops, something New Delhi has firmly opposed, citing concerns for farmers. Other unresolved issues include non-tariff barriers in agriculture and regulatory challenges in the pharmaceutical sector.
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