India-US trade pact likely to miss 'Fall' deadline, New Delhi seeks clarity on Trump's policy

While India and the United States work towards finalising the initial aspects of a bilateral trade deal, reports are emerging that both nations will likely miss the fall deadline in finalising an agreement. Sources close to the matter told The Times of India that New Delhi is seeking clarity from the US President Donald Trump’s administration on its trade policy.

While the two nations are finalising an “initial tranche” of the proposed trade deal before July 9, Washington, DC, is yet to give clarity on its trade policy beyond the Trump tariffs. “A long-lasting agreement will require the US to move beyond a case-by-case approach, which can form the basis for a durable agreement,” the source told The Times of India.

The source stated that New Delhi is seeking clarity on how the tariff cuts committed by the US Trade Representative will be implemented, since there is no clarity on whether the move would require approval from the US Congress. India is also monitoring the legal challenges to Trump’s reciprocal tariffs, which have created “uncertainties on how the duty cuts will be negotiated.”

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Three factors India will be looking at

The two nations started discussing a bilateral trade agreement following the meeting between US President Donald Trump and Prime Minister Narendra Modi in February. Following the talks, it was announced that the two nations had agreed to negotiate a bilateral trade deal by the Fall before the US President decided to roll out reciprocal tariffs on April 2, which was suspended later.

Meanwhile, it is pertinent to note that the American trade deals with the United Kingdom and China are also interim and are not final agreements. The source told TOI that New Delhi will be looking at the following three key factors while negotiating a deal with the Trump administration:

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• New Delhi “wants to secure the best possible deal for its businesses so that they can get market access in return for lower duties in India,” a source told TOI. The source argued that an agreement would give American companies access to a market of close to 1.5 billion people.
• The Indian government will also be looking at how tariffs are being reset for other countries to determine its next move forward.
• The government would seek protection in several segments, such as agriculture and segments like staples are fully on board.

The source concluded that while the current negotiation is focusing on goods trade, India’s interests in the service sector are not getting addressed at the moment.