The US may reduce its proposed tariffs on India to below 20% as the Trump administration has started working on an interim trade dal with the South Asian nation, according to Bloomberg reports. "India doesn't expect to receive a tariff demand letter - unlikely many other nations this week - and anticipates the trade arrangement will be announced through a statement," sources told the newswire.
They added that the interim deal will allow continued talks, giving India space to resolve outstanding issues before a broader agreement is finalised. Though the timing of the announcement is not out yet, the deal is likely yo set a baseline tariff below 20% as compared to initially proposed 26%, it said.
If the deal is finalised, India would join a select group of countries to have struck trade deals with the Trump administration. This comes as President Trump surprised many global trade partners this week by unveiling steep tariff hikes - some reaching up to 50% ahead of an August 1 deadline.
India is seeking to secure a deal on more favourable terms than the one US President Donald Trump signed with Vietnam, which included 20% import duties. However, Vietnam is seeking to bring the tariff number down. Besides Vietnam, Trump has also announced a trade deal with the United Kingdom.
India-US Trade Deal
India was among the earliest countries to begin trade negotiations with Trump this year, but tensions have surfaced in recent weeks. Trump had stated that a deal with India is within reach, yet in the same breath. He warned of possible new tariffs in response to India's alignment with the BRICS bloc.
Indian officials are expected to travel to Washington soon to move the discussions forward. According to earlier reports by Bloomberg News, India has already presented what it considers its final offer and outlined clear non-negotiable terms.
The US is close to making a trade deal with India, as Trump administration started sending letters detailing the levies that Washington will impose on products from those countries entering America.
"Now, we've made a deal with the United Kingdom, we've made a deal with China...We're close to making a deal with India,” Trump said on Monday.
Last week, Commerce Minister Piyush Goyal said that India does not enter into any trade agreement based on deadlines and will accept the proposed trade deal with the US only when it is fully finalised, properly concluded and in the national interest.
The high tariffs announced by the US on April 2 were suspended by the Trump administration till July 9.
