India ‘strategic ally’, trade deal being finalised: White House

“The President said last week [that the US and India are very close to a trade deal], and it remains true. I just spoke to our Secretary of Commerce about it. He was in the Oval Office with the President. They are finalising these agreements, and you’ll hear from the President and his trade team very soon when it comes to India,” Leavitt said.

While India–US trade talks appear to be progressing in the right direction, China has warned countries against negotiating deals at its expense. This comes at a time when Indian electric vehicle manufacturers are facing supply constraints due to disruptions in the distribution of rare earth elements from China.

“If such a situation occurs, China will not accept it and will take resolute countermeasures to safeguard its legitimate rights and interests,” China’s Commerce Ministry warned.

Ajay Srivastava, head of think tank GTRI, said that with India’s chief trade negotiator in Washington DC and the clock ticking, the next seven days could determine whether India and the United States settle for a limited “mini-deal” or walk away from the negotiating table — at least for now.

“Under such a deal, India is expected to cut MFN tariffs on a wide range of industrial goods, including automobiles — a persistent demand from Washington. In agriculture, India may offer limited market access through tariff reductions and tariff-rate quotas (TRQs) on select US products such as ethanol, almonds, walnuts, apples, raisins, avocados, olive oil, spirits, and wine,” Srivastava said.

However, India is unlikely to budge on sensitive sectors, and tariff cuts are not expected for dairy products or key food grains such as rice and wheat, where farm livelihoods are at stake, he said.

“These categories are politically and economically sensitive, affecting over 700 million people in India’s rural economy,” Srivastava noted.

Beyond tariffs, GTRI said the US is expected to press India for large-scale commercial purchases — including oil and LNG, civilian and military aircraft from Boeing, helicopters, and nuclear reactors.

“There may also be pressure on India to ease FDI restrictions in multi-brand retail — potentially benefiting firms like Amazon and Walmart — and to liberalise rules on remanufactured goods, currently subject to stringent import norms,” he said.

In return, the US will refrain from reimposing the controversial 26 per cent country-specific tariffs on Indian goods, which were unilaterally announced by President Trump on April 2.

Instead, a 10 per cent baseline tariff may apply to most imports from India — but the US will not lower its own MFN tariffs on Indian exports, Srivastava said.