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What's in the 'early tranche' of the India-US trade deal?
The deal is likely to be finalized before July 9

What's in the 'early tranche' of the India-US trade deal?

Jun 16, 2025
11:04 am

What's the story

India and the United States are on the verge of finalizing an 'early tranche' of their proposed bilateral trade agreement. The two countries are now working on the possible text for this deal, which is likely to be finalized before July 9. This comes ahead of US President Donald Trump's plan to lift a freeze on reciprocal tariffs.

Negotiation details

India mulls concessions on certain agricultural products, automobiles

The Indian government is mulling giving concessions on certain US agricultural products and automobiles. In return, it hopes to get a 10% duty—Trump's baseline tariff—on labor-intensive goods like textiles, footwear, and possibly some auto parts. This strategy is aimed at making Indian exports more competitive if reciprocal tariffs come into play.

Trade strategy

Last round of negotiations

India's 26% reciprocal tariffs, including the 10% baseline duty, are expected to give it a competitive edge over several countries in global exports. The last round of negotiations with US officials also included discussions on sanitary and phytosanitary standards as well as technical barriers to trade. These are issues that Indian exporters have been facing while sending goods to the US.

Legal impact

Several issues to play role in finalizing early tranche

Several issues, including a court ruling on reciprocal tariffs that Trump had invoked emergency provisions for, will play a role in finalizing the early tranche. This is scheduled for September/October. India also wants an arrangement where it has an edge over its peers if these tariffs are declared illegal by American courts.