India set for favourable US trade agreement amid tariff negotiations

The United States is reportedly moving toward an interim trade agreement with India that could reduce proposed tariffs to below 20%, sources familiar with the discussions said. This potential deal would position India favorably compared to other countries in the region facing higher tariffs under the current US trade policies, Bloomberg reports.

Unlike many nations expected to receive formal tariff demand letters this week, India does not anticipate such a notification. Instead, officials expect the arrangement to be announced via an official statement, according to the sources, who requested anonymity due to the private nature of the negotiations.

The interim deal is designed to allow continued dialogue between the two countries, giving New Delhi room to address outstanding trade issues ahead of a broader, more comprehensive agreement anticipated this fall. The statement is expected to establish a baseline tariff rate below 20%, significantly lower than the initially proposed 26%, while leaving open the possibility of further negotiations on tariff levels as part of the final pact.

The exact timing of the interim agreement remains unclear.

If finalised, India would join a short list of nations that have secured trade deals with the Trump administration, which has otherwise surprised many trading partners with announced tariffs reaching up to 50% ahead of an August 1 deadline.

India’s Ministry of Commerce and Industry has not responded to requests for comment, and neither the White House nor the Commerce Department immediately replied to inquiries.

New Delhi aims to negotiate terms more favourable than those offered to Vietnam, where the administration imposed a 20% import duty— a rate that reportedly took Hanoi by surprise and is still under review. The United Kingdom remains the only other country with a formally announced trade deal under the Trump administration.