A significant trade agreement, the India-US Mini Trade Deal, is speculated to be declared tonight, coinciding with the final day of the US tariff deadline, July 9th. While other nations have an extended deadline until August 1st, India is not among them, sparking anticipation of an official announcement soon.
On Tuesday, a senior official stated an agreement was reached over a limited trade deal between the nations, as further negotiations are needed for several sectors. According to the official, both countries successfully negotiated this limited trade agreement after weeks of intense discussions.
The official noted that India remained steadfast on its demands, prepared to endure American tariffs. However, Washington expressed willingness to negotiate, culminating in an agreement, notwithstanding the lack of an official announcement.
How much tariff might the US impose on India?
The specifics of the India-US trade deal remain undisclosed, leaving uncertainty about the exact tariffs the US will impose on India. Reports suggest tariffs could range between 10-20%, as President Donald Trump threatened a 10% extra tariff on BRICS nations, of which India is a member, implying tariffs won't drop below 10%. A 26% reciprocal tariff on India has been announced recently.
Source: aajtak
This deal will be beneficial for India
During the fiscal year 2022-23, India exported goods worth 6.84 lakh crores to the USA, while the exports amounted to 6.75 lakh crores in 2023-24. In contrast, India imported goods worth 4.43 lakh crores from the USA in 2022-23, which fell to 3.67 lakh crores in 2023-24. Essentially, India exports twice the value of parcels it imports from the USA. Thus, even a 10-20% tariff might still work in India's favor.
Higher tariffs on China and Bangladesh could favor India
In May 2025, following the Geneva agreement, China imposed an average 32% tariff on the USA, while the USA imposed around 51% tariffs on Chinese products, with a potential increase from August 1st. This situation could benefit India. Furthermore, a 35% tariff imposed on Bangladesh by the US might impact its textile industry, providing an edge to Indian companies.
What will both nations gain from this deal?
India can extend its market reach in the USA for textiles, pharmaceuticals, and jewelry. The removal of a 26% reciprocal tariff will make Indian exports cheaper and expand trade, potentially reaching $500 billion in bilateral trade between India and the USA by 2030.
On the other hand, the USA can seize opportunities to sell products like pecan nuts, blueberries, and automobiles in India with lowered tariffs, bolstering its position in the Asian market. Additionally, this opens the pathway for a comprehensive deal with India in the future.
