U.S. And India Close to Interim Trade Deal, May Avoid High Tariffs

The United States and India are close to reaching an interim trade agreement that could help India avoid steep tariffs. According to a Bloomberg report, the deal might set new tariffs at under 20%, much lower than the hikes facing other countries. This is a big change from the earlier proposal of 26%.

Unlike other Asian countries, which are preparing for tariffs as high as 50% by August 1, India may not even get a formal letter demanding these tariffs. If agreed, this would put India in a stronger position. So far, U.S. President Donald Trump has only announced trade deals with Vietnam and the UK. Most other nations are facing blanket tariffs of 15% to 20%.

Vietnam, for example, was surprised by a 20% rate and is still trying to lower it. If India finalizes this deal, it will join a small group of countries getting tariff relief from Washington at a time when many are under pressure.

Tariffs already announced in Asia range from 20% for Vietnam and the Philippines to 40% for Laos and Myanmar. The Bloomberg report said India is aiming for better terms than Vietnam and will soon send negotiators to Washington. India has made it clear it won’t open its markets to genetically modified crops, to protect its farmers.

Some tough issues still remain, such as rules on agriculture and pharma products. But this interim deal would give both sides more time to sort things out before a bigger agreement is expected later this year.

The Indian Ministry of Commerce and Industry, the White House, and the U.S. Commerce Department did not comment on the report.