India likely to strike first trade deal to avoid Trump tariffs

US Treasury Secretary Scott Bessent has indicated that India is on track to secure the first bilateral trade agreement aimed at avoiding President Donald Trump’s reciprocal tariffs, according to a report by the New York Post. A 26% tariff on Indian exports to the United States is currently under a 90-day pause, due to expiration on July 8. However, Indian goods are still subject to a 10% tariff under the existing American policy.

Speaking at a roundtable with about a dozen reporters in Washington, Bessent remarked that trade talks with India are “very close” to a successful conclusion. He explained that India’s relatively low tariff rates, absence of currency manipulation, and limited government subsidies have made it easier to negotiate an agreement. Bessent noted that India has fewer non-tariff trade barriers than other countries, facilitating smoother discussions. The session was held on the sidelines of the annual World Bank and International Monetary Fund meetings.

President Trump has been pressing foreign nations to dismantle both tariff and non-tariff barriers to American goods and to work towards eliminating US trade deficits, the New York Post said. In a related development, US Vice President JD Vance, speaking in Jaipur on Tuesday, urged India to lower non-tariff barriers, open up its markets further, and increase purchases of American energy and military hardware. He outlined a broader vision of strengthening US-India relations to help shape a “prosperous and peaceful” 21st century.

According to data cited by the New York Post from the US Census Bureau, India accounted for nearly 3% of all imported goods into the United States as of February. The Office of the US Trade Representative reported that the US had a USD 45.7 billion trade deficit with India in 2024.

Source: Economic Times