India and the United States are poised to announce a mini trade agreement within the next 24 hours, even as the temporary 10% baseline tariff introduced by the US will remain unchanged—for now. The deal, while limited in scope, is being seen as a critical trust-building measure ahead of more expansive talks on a comprehensive Bilateral Trade Agreement (BTA) starting post July 9.
A Breather from Trump’s 26% Tariff Threat
On April 2, US President Donald Trump imposed a 26% reciprocal tariff on Indian goods in response to what his administration claimed were trade imbalances. However, on April 9, Trump rolled back the steep tariff and introduced a uniform 10% baseline tariff for all countries, including India, giving a three-month window to negotiate individual trade deals. That temporary relief ends on July 9, adding urgency to seal at least a limited deal before the higher tariffs potentially snap back.
Dairy, Agri Off the Table—for Now
The expected agreement excludes contentious sectors like dairy and agriculture, long viewed as politically untouchable in India. Talks had hit a roadblock over US demands for wider access for its subsidised farm and dairy products, which New Delhi resisted to protect its smallholder farmers.
Instead, the mini deal will focus on market access for less sensitive items such as US apples, almonds, pecans, bluberries and possibly GM-derived animal feed—a calculated concession that doesn’t touch the consumer food chain.
A Reset in Phases
“This is a tactical pause, not a grand finale,” a senior Indian official said. “The mini deal keeps the momentum intact while laying the ground for a broader BTA discussion post-July 9.”
Negotiators on both sides are now preparing to dive into second-phase talks, expected to cover areas like tariff alignment, digital trade, investment norms, and regulatory standards.
Even with baseline tariffs staying at 10% for now, this upcoming mini deal signals that India and the US are committed to resolving friction and building a resilient trade partnership—one step at a time.
