India eyes three-phase trade deal with US as Donald Trump's reciprocal tariffs loom

India-US trade deal talks are progressing with negotiations underway for a trade agreement that India expects to be divided into three phases. The aim is to finalise an initial trade deal ahead of July, when US President Donald Trump's retaliatory tariffs become effective.

The negotiations remain in progress, with uncertainty regarding the US administration's stance on a three-phase trade agreement approach. Commerce Minister Piyush Goyal is currently on a four-day visit to Washington, concluding Tuesday, where discussions with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick are anticipated to progress the trade talks.

India-US Trade Deal in Three Phases?

• The first phase of the trade deal is expected to include industrial goods market access, certain agricultural products, and address specific non-tariff obstacles, including quality control specifications, sources told Bloomberg.
• A broader and more comprehensive second phase of the India-US trade deal is anticipated between September and November, according to Indian officials with knowledge of the situation. This phase is expected to have 19 areas specified in the April terms of reference. The timing could coincide with Trump's visit to India for the Quad leaders' summit.
• The last phase of the agreement would likely materialise next year, pending US Congressional approval, the Bloomberg report said citing Indian officials familiar with the discussions.

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Following Prime Minister Narendra Modi 's White House visit in February after Trump's inauguration, India was amongst the initial nations to commence trade discussions with the US. The leaders committed to enhancing trade relations and finalising the first portion of the bilateral agreement by autumn this year. Subsequently, India has indicated potential for swift mutual benefits prior to the autumn deadline.

Indian authorities maintain that negotiations are progressing, despite recent indications of strain. The Indian government has taken a firmer position in discussions, including last week's warning of reciprocal duties on US products.

Trump has minimised the urgency for a trade agreement whilst asserting that India proposed eliminating tariffs on US goods entirely.

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