US and India Near Interim Trade Deal to Ease Tariff Burden
Tariffs Below 20%: US and India Signal Stronger Economic Ties
US and India: In a significant shift in global trade diplomacy, the United States is moving towards finalising an interim trade deal with India that could slash proposed tariffs to under 20%, according to sources familiar with the negotiations. This development, if confirmed, would strategically position India as a preferred trade partner amid Washington’s sweeping new tariff regime.
Unlike several of its Asian peers, India is unlikely to receive a formal tariff demand letter from the US, insiders revealed. Instead, both nations are expected to issue a joint statement in the coming weeks that outlines a provisional framework, setting a ceiling tariff rate under 20%, a step down from the initially proposed 26%.
The tentative deal aims to keep talks open, providing New Delhi crucial breathing space to iron out lingering disagreements before a more comprehensive pact is anticipated in the fall. The statement, insiders suggest, will likely include language that allows ongoing negotiations around the final rate and terms.
This move comes as the Trump administration rocks the global trade landscape, unveiling tariff hikes up to 50% on dozens of countries ahead of an August 1 deadline. In stark contrast, the interim trade deal with India would place the South Asian powerhouse in an elite group of nations—including the United Kingdom and Vietnam—that have reached or are nearing trade arrangements with Washington.
US and India: Strategic Timing and Regional Edge
India has been proactively engaged in trade talks since early this year. With growing global uncertainties, New Delhi has sought to capitalise on its economic leverage and diplomatic channels to forge a deal that safeguards its interests.
In comparison, Vietnam—which recently signed a deal that includes 20% import duties—was reportedly surprised by the terms and is now attempting to renegotiate. India, by contrast, is working to secure better conditions, underscoring its determination to be more than just a passive participant in the shifting trade order.
Tariff announcements this week have been sharply varied across Asia: Vietnam and the Philippines are facing 20% duties, while Laos and Myanmar have been slapped with steep 40% tariffs. Against this backdrop, a less-than-20% rate for India would mark a significant diplomatic and economic win.
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