New DelhiUS President Donald Trump has said a big trade deal may be coming up with India and asserted that the US would “open up” the country. His statement comes as trade negotiating teams from the two countries have come together in Washington DC to take forward the talks on the proposed India-US bilateral trade agreement (BTA).
The White House has now indicated the possibility of postponement of the July 9 deadline, when the 90-day pause on reciprocal tariffs was to end, which may give more time to the Indian side to work on a `balanced’ interim deal that would have political acceptance at home.
“..We’re not going to make deals with everybody... But we’re having some great deals. We have one coming up, maybe with India, a very big one. We’re going to open up India. In the China deal, we’re starting to open up China. Things that never really could have happened, and the relationship with every country has been very good, “ Trump said on Thursday per a video put up by the White House.
While India and the US are negotiating a BTA that includes various elements such as goods, services, digital trade, IPR, government procurement and work visas, there has been pressure on India to carve out an interim agreement by July 9, to avoid the imposition of full reciprocal tariffs of 26 per cent announced on Indian goods by Trump.
On April 2, Trump announced reciprocal tariffs on all countries with which the US had a trade deficit, with the tariff rate varying largely depending on the size of the deficit. Some of India’s competitors, such as Vietnam, Bangladesh, Indonesia and the Philippines, had higher reciprocal tariffs slapped on them compared to India. The tariffs, except a baseline of 10 per cent, were paused by Trump till July 9.
However, the July 9 deadline may not be “critical”, and there remained a possibility of its extension, pointed out White House Press Secretary Karoline Leavitt on Thursday.
“Perhaps it could be extended, but that’s a decision for the president to make,” Leavitt said when asked if the July 9 deadline would be extended.
She also warned that if any country failed to reach a trade deal with the US by the deadlines, the President could simply provide these countries with a deal by picking a reciprocal tariff rate that he believes is advantageous for the US.
It has been difficult for India to narrow down an interim trade package as the US has been highly demanding and seeking market access for a wide spectrum of goods, including agriculture and dairy products, some of which may be politically sensitive red lines for India.
“The US has also not yet agreed to roll back the entire 26 per cent reciprocal tariff, including the baseline tariff of 10 per cent already applied. Nor has it given any commitment on withdrawing the sector specific tariffs of 50 per cent on steel and aluminium and 25 per cent on automobiles,” a source tracking the matter said.
A lot of distance still needs to be covered to get an interim deal in which both sides get something to take back home, and an extension of the July 9 deadline would help in reaching such a deal,” the source added. The first tranche of the comprehensive India-US BTA has a much later timeline, scheduled for Fall 2025 (September-October).