India and the United States are inching closer to an in-principle trade agreement following a series of high-level meetings between India’s Commerce Minister Piyush Goyal and US officials.
Sources told CNBC-TV18 that the discussions with US Secretary of Commerce Howard Lutnick and USTR Jamieson Greer have been “very positive” and that both sides could reach a deal as early as next week.
However, a final agreement will need political clearance from the highest levels, possibly from US President Donald Trump. While the two sides are optimistic, this final nod could be crucial in sealing the deal.
As part of the understanding, the US is unlikely to completely exempt India from reciprocal tariffs. A 10% tariff is still expected on certain Indian goods, even though it is a relief from the previously planned 26%. At the same time, there could be zero-duty access for some Indian exports, especially in labour-intensive sectors and goods produced by small and medium enterprises. The finer details of these exemptions are still being worked out.
The agreement is expected to be finalised before July 9, which is when the 26% reciprocal tariffs are scheduled to come into effect.
Meanwhile, sources also said Trump’s recent comments about a potential 25% tariff on Apple products not made in the US are unlikely to affect Apple’s manufacturing operations in India. It would be neither feasible nor economical for Apple to shift production to the US in the short term. The company is expected to continue using India as a key manufacturing hub to serve global markets over the next few years.
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