Donald Trump’s Tariff Pause Kicks Off 90-Day Push for Big India-US Trade Deal

India and the United States have finalised the terms of reference for the first phase of a long-pending bilateral trade agreement. Talks are now expected to accelerate, with both nations targeting a preliminary deal within the next 90 days. A senior Indian trade official described the negotiations as being in an “advanced stage” and hinted at a potential “win-win shape and form” for both sides.

This development follows U.S. President Donald Trump ’s recent decision to temporarily suspend additional tariffs of 26% on Indian goods until July 9. The White House’s April 2 order had imposed universal tariffs on exports from over 60 countries, with particularly steep levies on key U.S. competitors including India, Vietnam, and Thailand. India, however, refrained from retaliatory action, signaling a more diplomatic and cooperative approach to salvaging trade ties.

In FY24, bilateral trade between the two countries surpassed $118 billion, making the U.S. India’s largest trading partner. The proposed deal is expected to provide relief to several sectors including pharmaceuticals, shrimp, steel, textiles, and auto parts—all of which are vulnerable to steep American import duties.

“Our talks with the U.S. are ahead of similar discussions with other nations,” the Indian trade official added, noting that negotiations would continue virtually over the coming weeks. While the suspension of tariffs applies to several U.S. trade partners, it notably excludes China, including Hong Kong and Macau—indicating the strategic tilt of Washington’s trade diplomacy.

India is now leveraging the 90-day pause to lock in more favourable terms, potentially boosting exports, reducing trade friction, and expanding market access for Indian goods. The agreement, if concluded within the timeline, could significantly reshape bilateral economic relations and mark a reset in India-U.S. trade dynamics under the Trump administration.

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Donald Trump on April 2nd imposed 26 per cent tariff on India, which was higher than the tariffs imposed on the neighboring countries like Vietnam, Bangladesh , Sri Lanka etc. But now Trump has announced 90-day pause on reciprocal tariffs.