Washington D.C., July 16, 2025 — In a significant development in Indo-US relations, former President Donald Trump has hinted that a trade agreement between the United States and India is nearing completion. The proposed deal, which could mirror the recent trade pact between the US and Indonesia, aims to grant American companies improved access to India’s vast and lucrative market.
During an interaction with reporters, Trump stated,
“We made a deal with Indonesia… We have full access into Indonesia. That’s probably the biggest part of the deal. India is basically working along that same line. We are going to have access to India.”
Talks in Final Stages
Trade negotiations between the two countries have been ongoing for months, focusing on reducing tariffs and increasing market openness. An Indian commerce ministry delegation is currently in Washington to hold another round of discussions aimed at sealing the interim trade pact.
Washington has already sent letters to several countries informing them about upcoming reciprocal tariff rates set to take effect on August 1. India is hoping to reach a consensus before the deadline to avoid these additional tariffs.
What’s at Stake?
The US administration is keen on lowering trade barriers to American agricultural, dairy, steel, aluminium, and auto exports. Specifically:
- Agricultural and Dairy Products: The US wants India to reduce duties in these sectors. However, India remains firm, as it has never offered dairy duty concessions in any free trade agreement.
- Steel and Aluminium: India is pushing for the removal or relaxation of the 50% tariff imposed on its exports.
- Automobiles: New Delhi is also seeking relief from the 25% US import duty on Indian vehicles.
India, on its part, is asking for the elimination of the additional 26% tariff that has been placed on some of its exports.
India Maintains Caution
Despite mounting pressure, India is not willing to rush the process. Commerce Minister Piyush Goyal emphasized earlier this month that India will not finalize any trade deal unless it is fully in the national interest.
“India does not enter into any trade agreement based on deadlines. The proposed trade deal with the US will only be accepted once it is properly concluded and serves the national interest,” said Goyal.
This assertive approach reflects India’s commitment to safeguarding its domestic industries, especially in sensitive sectors like agriculture and dairy.
Background: Tariff Timeline
In April, Trump had announced steep tariffs on a range of countries including India. These were initially postponed by 90 days from April 2 to July 9, and then further extended to August 1. With the new deadline approaching, the urgency to finalize the agreement has intensified.
Strategic Importance
The Indo-US trade relationship has always been a pillar of strategic diplomacy. A successful deal would not only ease trade tensions but also reinforce political ties between the two largest democracies in the world. Moreover, aligning with India’s economic aspirations and global standing could help the US offset the growing influence of China in Asia.
As both nations inch closer to an agreement, all eyes are on the outcomes of the ongoing negotiations. While the US is eager to gain a stronger foothold in the Indian market, India remains vigilant in ensuring that its domestic sectors are not compromised. If sealed, this deal could mark a new chapter in Indo-US economic cooperation.