India and the United States are reportedly close to finalizing an interim trade agreement that could shield Indian exports from steep US tariff hikes expected to take effect from August 1. According to sources cited by Bloomberg and other outlets, the deal would cap tariffs on Indian goods at under 20%—a significant reduction from the 26% initially proposed—and far below the 20–50% rates being imposed on other Asian nations like Vietnam, the Philippines, Laos, and Myanmar.
Notably, India is not expected to receive a formal tariff notice at all, setting it apart from other trade partners. The agreement would be announced via a joint statement and is intended as a temporary framework while both sides continue negotiations on broader trade concerns, especially in sensitive areas such as agriculture and pharmaceuticals.
If finalized, India would join a small group of countries—including the UK and Vietnam—that have managed to secure relief from sweeping tariff hikes under the Biden administration’s evolving trade policies. Vietnam, which was hit with a 20% duty, is still negotiating for a reduction, underscoring the favorable terms India appears to have secured.
Indian trade negotiators are expected to visit Washington soon to iron out remaining issues. New Delhi has reportedly drawn clear red lines, including a refusal to open its market to genetically modified crops due to concerns about the impact on Indian farmers. Other sticking points involve non-tariff barriers and regulatory challenges.
The news has been welcomed by Indian exporters, although trade experts caution that the reprieve is temporary. They advise continued diversification and long-term planning to guard against future protectionist shifts.
So far, neither the Indian Ministry of Commerce nor the US government has officially commented on the potential deal.