India is negotiating with the United States on a three-stage trade deal.

The country aims to finalize an interim agreement before July, according to officials in New Delhi.

This deadline coincides with the implementation of reciprocal tariffs previously announced by US President Donald Trump.

The interim agreement is expected to focus on market access for industrial goods and certain agricultural products.

It will also look at easing some non-tariff barriers, such as quality control standards.

However, discussions are ongoing, and it is unclear whether the US has accepted the proposed three-stage framework.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Trade tensions between India and US have a complicated history

India’s pursuit of a three-phase deal comes after years of escalating trade frictions with the United States, dating back to Trump’s first term.

In 2019, the Trump administration terminated India’s Generalized System of Preferences (GSP) benefits, affecting approximately $5.6 billion worth of Indian exports to the US1.

During this period, Trump labeled India the “tariff king” due to high import duties on American goods, a characterization that highlighted the administration’s frustration with India’s trade policies2.

The bilateral trade imbalance has been a persistent issue, with the US trade deficit with India growing from $21 billion in 2018 to $45.6 billion for goods in 2024, providing context for why this negotiation is particularly urgent for both sides2.

Indian officials previously calculated that the revenue impact of losing GSP benefits was approximately $190 million annually, which they considered relatively small compared to their overall export volume. This suggests India may have flexibility in negotiations on certain points1.

2️⃣ Current negotiations occur amid Trump’s broader tariff strategy

The urgent timeline for India’s negotiations aligns with Trump’s recent pattern of imposing significant tariffs on trading partners, including a universal 10% baseline tariff on all imports announced earlier this year3.