India is currently negotiating with the United States to remove a 10% baseline tariff that the US had imposed on imports from all countries starting April 2. These talks are a key part of an early trade deal both nations are working towards.
US officials have suggested using the same approach as in their deal with the UK, where British products still face the 10% tariff. However, India is against this and wants the 10% tariff on Indian goods to be removed completely. India also wants an assurance that the additional 16% tariff the US plans to impose from July 9 will not be implemented.
A US trade team, led by Assistant Trade Representative Brendan Lynch, arrived in New Delhi in early June for the fifth round of face-to-face talks. This visit is longer than expected, lasting until June 10, which shows the importance of these negotiations.
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According to sources, India believes that both the 10% and the upcoming 16% tariffs should be removed together once an interim trade deal is signed. If not, India may continue to apply similar tariffs on US goods until the US removes the full 26% duty.
On February 13, Prime Minister Narendra Modi and then-US President Donald Trump had announced a goal to double India-US trade to $500 billion by 2030 under “Mission-500.” They agreed that the new trade deal must be fair, balanced, and beneficial to both countries.
One official said, “The US is the world’s largest economy, and India is the fastest-growing major economy. A balanced and fair deal is necessary for long-term success.”
India is open to giving more market access to US goods, but only if the US offers the same in return. Officials believe that India and the US have complementary trade interests and are not direct competitors.
Both sides are working positively toward what’s called an “early harvest” deal before July 9. This mini-deal would reduce or remove some tariffs and trade barriers and improve supply chain links. A larger trade deal is expected by September or October 2025, followed by a full and comprehensive trade agreement later on.
Earlier in May, India’s Commerce Minister Piyush Goyal was in the US meeting with his American counterparts to discuss these issues.
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In comparison, even after the UK and US signed a small trade deal in May, the 10% US tariff on UK goods remained. India wants to avoid that outcome.
Talks are ongoing, and both nations are aiming for a win-win solution soon.
