US-India Mini Trade Deal Likely To Be Inked On July 4 In Washington, Bigger Deal During Donald Trump's India Visit: Sources

Washington: India and the United States are likely to sign a mini trade deal on July 4, while a broader, full-fledged agreement is expected to be finalised during Donald Trump's visit to India later this year, according to sources.

This development comes as India’s External Affairs Minister, S Jaishankar, is in Washington holding crucial meetings related to India-US trade negotiations. These talks take place ahead of the July 9 deadline set by the US President, before reciprocal tariffs are expected to be reimposed in bilateral trade.

Both India and United States have been holding talks on formalising a trade deal ever since Donald Trump had announced a set of reciprocal tariffs on partner trading nations including India, China, Australia, Europe, New Zealand, Singapore, Japan, Pakistan to over 130 nations on April 2.

According to sources, negotiations are underway to finalise a mini trade deal between India and the United States, while a comprehensive ‘Full Trade Agreement’ is expected to be signed during US President Donald Trump's visit to India in September.

Under the mini trade deal, both nations are working to clarify and resolve tariff issues on certain items, with a baseline rate estimated around 10 percent, sources said. A larger agreement is expected to be finalised at a later stage.

Sources say that India and United States may announce a mini-trade pact as soon as in the next 24-48 hours.  

Agriculture likely to be exempted from tariffs 

According to sources, the agriculture sector is likely to be exempted from Donald Trump's tariffs when India and the United States sign a trade deal, as both nations work toward an agreement that is mutually beneficial and acceptable.

Will have a deal with India, says Donald Trump

On Tuesday, US President Donald Trump while speaking to reporters said that he thinks he's going to have a deal with India.    

In his remarks, the US President said that a new trade deal with India is expected soon. He stated the deal would feature “much less tariffs” and would enable American businesses to compete more freely in the Indian market.

However, Donald Trump did point out India’s current trade barriers but said he believes that will change.

When Donald Trump announced reciprocal tariffs on April 2?

Donald Trump on April 2 announced a mammoth reciprocal tariffs on over 130 nations, levying trade tax on partner trading nations including India, China, Europe, Australia, UAE among others. 

The United States President called it a ‘Liberation Day’ declaring a national emergency regarding the national trade deficit and a baseline 10 per cent tax on nearly all US imports.

However, a couple of days later, after the United States faced a massive backlash and retaliatory reciprocal trade tax from trading partner, Donald Trump announced a 3-month pause on imposing reciprocal tariffs.

During these three months, representatives of all the partner trading countries indulged in negotiations to formulate a trade deal that is mutually beneficial.

What's Donald Trump's reciprocal tariff rate on India? 

US President Donald Trump had announced a 26 per cent ‘discounted’ reciprocal tariffs on India (Indian exports) to the United States and 25 per cent tariffs on all foreign made automobiles.

Apart from India, Donald Trump had announced reciprocal trade tax on a total of 133 countries including China 34%, Pakistan 29%, Japan 24%, European Union 20%, 10% on United Kingdom, Australia, New Zealand, United Arab Emirates, and Saudi Arabia, Israel 17%, 25% South Korea, 32% Taiwan, 36% Thailand, 31% Switzerland, 32% Indonesia, 24% Malaysia, 30% South Africa, 10% Brazil, 37% Bangladesh, 10% Singapore among many others.