India and the United States are racing to finalize a mini trade deal before the July 9 deadline, when a 90-day suspension on reciprocal tariffs (up to 26%) will expire. Without an agreement, tariffs could revert or even increase starting August 1.
📌 Deal Scope & Remaining Disputes of India US Trade Deal
What’s at stake – goods not services:
The current arrangement focuses solely on trade in goods, excluding sensitive sectors like agriculture, dairy, and GM seeds. Talks on services and digital trade will continue after August.
India’s red lines:
India has firmly stated that any mini deal must not compromise national interest, especially in agriculture and dairy. If India deems terms unfavorable, it may opt out despite looming tariffs.
🧭 Timeline & Political Pressure
- The US Trade Representative (USTR) has cleared draft terms.
- Approval now rests with President Trump; any changes may delay final signing.
- Recent comments from Treasury Secretary Scott Bessent suggest another deadline extension to August 1, but only if a deal is near finalization.
📈 Market & Economic Impact
Impact on India’s Rupee & Markets:
According to Reuters, financial markets in India are watching somberly. A trade deal could stabilize the rupee and boost investor confidence, while failure may increase volatility.
Trade flow stakes:
India seeks tariff removal on key export sectors like textiles, electronics, gems, and pharma, while the US wants access to dairy, agriculture, automobiles, and digital trade goods ($LNG etc.).
🔎 Key Deal Dynamics
- Scope of Mini Deal
A deal is expected imminently, excluding contentious sectors, with future add-ons planned. - US Concessions?
The US may offer reduced tariffs on steel/aluminium or energy imports (LNG & crude) to balance gains. - Tariff Letters as Leverage
Trump has warned of sending “tariff letters” to nations that don’t reach a deal by July 9; any remaining tariffs would revert and possibly increase.
⚖️ Strategic Stakes & Road Ahead
- India’s stakes: Any unfavorable terms—especially in agriculture/dairy—could provoke domestic political backlash.
- US dynamics: Trump needs to deliver trade wins to meet his “90-in-90” deal promise. India remains one of the last unresolved major partners
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