Informist, Friday, Jul. 4, 2025

NEW DELHI– The widely awaited announcement of a trade deal with the US is unlikely to come in the next two days at least, according to a top commerce ministry official. Indian industry has been hoping that a trade deal announcement with the US, before Washington's 90-day pause on reciprocal tariffs ends Wednesday, would insulate its exports to the US from an additional 26% duty.

India, which wants to cover its labour-intensive sectors under the bilateral trade agreement with the US, will not sign a deal under pressure, the commerce ministry official said. "We would not compromise like Vietnam," the official added. Under a recently signed trade deal between Washington and Hanoi, Vietnamese goods are set to attract 20% duty in the US, while American traders can export goods to Vietnam at zero tariff.

The commerce ministry official said the US is also not very clear on what exactly it wants from the trade pact with India. This is proving to be a hindrance to the negotiations, the official added.

Another reason for the delay in the trade deal is disagreement over market access in the farm sector. US President Donald Trump has, on multiple occasions, expressed his interest in getting access to India's agriculture sector. But New Delhi draws the line at opening up the farm sector. The commerce ministry official said India will continue with its firm stance in this regard.

There is a possibility that both sides can conclude an early trade pact covering only the agreed-upon sectors, the official said, adding, "All options are on the table." But even under the trade deal, the US's 50% duty on steel imports is likely to stay, the official said. "Trump is unlikely to exempt any nation from steel tariffs."

Shedding more light on the negotiations, the official said the deal would cover only goods trade. "No social security agreement to accompany," the official said. The official also mentioned that New Delhi and Washington have not been having any discussion on H-1B visas to Indian citizens in the US.

Washington's reciprocal tariffs, if they do take effect Wednesday, may significantly hurt India's exports, as the US is India's top export destination with a 19.8% share in the country's total outbound shipments. India exported goods worth $86.51 billion to the US in the financial year 2024-25 (Apr-Mar) and had a trade surplus of $40.82 billion during the period, according to commerce ministry data. End

Reported by Krity Ambey

Edited by Rajeev Pai

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