Deal or Disaster? What’s at Risk If India and U.S. Don’t Agree

India and the United States have been trying to close a trade deal for a while, but key differences remain. Despite strong ties, issues like tariffs, market access, and digital rules are still unresolved.

Reports suggest that India and the United States are close to finalising an interim trade agreement, with a broader deal potentially taking shape later this year. The interim agreement reportedly covers around 6,000 items, with the focus on lowering tariffs on both sides.

Also Read: Is New Delhi Close To Reaching a Trade Deal With Washington? Here's What US Treasury Secretary Scott Bessent Says | Republic World

Why this matters?

Trade between the two countries is already over $190 billion a year. A deal could boost sectors like defence, technology, clean energy, and agriculture, and offer businesses more clarity and stability.

What if talks fail?

1. Tariffs may return: Without a deal, past disputes over taxes on items like medical equipment and farm goods could resurface. India also wants back the trade benefits the US took away in 2019.
2. Uncertainty for businesses: Companies in both countries may face unclear rules, which could slow investment and impact industries such as pharmaceuticals and e-commerce.
3. Strain on wider partnership: A failed deal could weaken the momentum in US-India relations, especially when both sides are working closely on countering China.
4. Missed chances in new areas: Without agreement on digital trade and technology, both countries could fall behind in setting the rules for the future economy.

Does a deal look probable?

Yes. India wants to boost exports and manufacturing, and the U.S. is looking to diversify its trade partners. Both sides share common goals, and with some flexibility, a deal could still come through.

The big picture

Even if the trade deal doesn’t happen, the overall U.S.-India partnership will continue. But missing this opportunity could slow down progress — especially at a time when the global trade landscape is quickly changing.