India Poised for Bilateral Trade Deal Amid Tariff Threat: US Treasury Secretary

United States Treasury Secretary Scott Bessent has signalled optimism that India could be the first country to secure a bilateral trade agreement with Washington, potentially avoiding a steep 26 per cent reciprocal tariff on its exports. The tariff, currently under a 90-day suspension, is scheduled to lapse on July 8, according to a report by the New York Post.

Speaking to journalists on the sidelines at the annual meetings of the World Bank and International Monetary Fund in Washington, Bessent indicated that negotiations with India are nearing completion. He cited India's relatively low tariffs, minimal non-tariff barriers, absence of currency manipulation, and limited government subsidies as key reasons why an agreement is within reach.

"India doesn’t have many high tariffs or non-tariff trade barriers. There’s obviously no currency manipulation and very little government subsidy. So, it’s much easier to strike a deal with them,” said Bessent during the roundtable.

At present, India—like other nations—is subject to a 10 per cent tariff under existing US trade policy. However, the looming reciprocal tariff of 26 per cent could be imposed if a deal is not reached by the July deadline.

The push for a new agreement comes amid President Donald Trump’s broader trade agenda, which includes a demand for dismantling tariffs and trade barriers imposed by other countries and efforts to reduce America’s trade deficits.

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While attending an event in Jaipur earlier this week, US Vice President JD Vance urged India to remove non-tariff restrictions, expand market access for American goods, and increase imports of US energy and defence products. Vance called for closer economic ties as part of a strategic vision for a 'prosperous and peaceful' 21st-century partnership between the two democracies.

As per US Census Bureau data cited by the New York Post, India made up about 3 per cent of total goods imported by the US as of February. In 2024, the US recorded a $45.7 billion trade deficit with India, according to figures from the Office of the US Trade Representative.