With US commerce negotiators set to achieve India Thursday for a two-day go to, the India-US commerce deal negotiations are coming into their remaining stage and will quickly see Delhi opening its market and reducing tariffs on a spread of American merchandise – from choose agricultural items to defence tools.
That is in alternate for concessions on reciprocal tariffs and improved entry to the US marketplace for India’s labour-intensive sectors reminiscent of textile and leather-based merchandise.
The White Home mentioned Tuesday that the US had requested nations to make their greatest affords on commerce negotiations by Wednesday, because the July 8 deadline for reciprocal tariffs is simply 5 weeks away.
“I can verify the deserves and the content material of the letter. The USA Commerce Consultant (USTR) despatched this letter to all of our buying and selling companions simply to provide them a pleasant reminder that the deadline is arising,” White Home spokesperson Karoline Leavitt mentioned.
Enhancing market entry for US exports reminiscent of oil, armaments, soybeans, corn, whisky and cars might assist handle Washington’s considerations over its items commerce deficit with India and excessive tariff boundaries.
US Secretary of Commerce Howard Lutnick mentioned Tuesday that the US aimed to convey again superior manufacturing and bridge the commerce deficit by rising exports to India, including that each side had “discovered a spot that basically works” for them.
Indian officers have indicated that diversifying oil and defence procurement is within the nation’s strategic curiosity and sourcing extra from the US might additionally considerably assist bridge the products commerce hole, as India’s refining capability has been rising alongside oil import dependency, which surged to 90 per cent in April 2025.
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India’s oil import combine has already undergone a big shift because the Ukraine struggle, with Russia rising as the highest provider, changing Iraq and Saudi Arabia. Official commerce knowledge confirmed that India had already stepped up oil purchases from the US. India’s import of crude oil from the US jumped 11.49 per cent to $63 billion in March 2025 in comparison with the earlier yr.
Defence tools from the US
India has had lengthy standing defence ties with Russia, owing to its reliability throughout instances when Western nations imposed sanctions. Nevertheless, the US now seems to be leveraging its place because the world’s largest market to spice up defence tools exports to India and scale back Delhi’s dependence on Russia.
Talking on the US-India Strategic Partnership Discussion board (USISPF) in Washington DC, Lutnick mentioned: “There have been sure issues that the Indian authorities did that usually rubbed america the fallacious manner. As an example, they often purchase navy gear from Russia. That’s a option to sort of get below the pores and skin of America, when you go to purchase your armaments from Russia.” He mentioned India is already “addressing” this difficulty.
In response to the Stockholm Worldwide Peace Analysis Institute (SIPRI), the biggest share of India’s arms imports between 2020 and 2024 nonetheless got here from Russia at about 36 per cent. Nevertheless, this was considerably decrease than the 55 per cent recorded in 2015-19 and 72 per cent in 2010-14.
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SIPRI’s report launched in March advised that India has elevated home manufacturing and is shifting its arms provide relations in the direction of Western suppliers – most notably France, Israel and the US – at a time when Russia is prioritising home manufacturing amid the continued Ukraine struggle.
US arms exports grew by 21 per cent between 2015-19 and 2020-24. The US share of world arms exports rose from 35 per cent to 43 per cent – practically equal to the mixed whole of the subsequent eight largest exporters, in keeping with SIPRI.
Agricultural imports from US
From excessive tariffs on agricultural imports to restrictions on genetically modified (GM) seeds and merchandise, the US has criticised a number of Indian commerce insurance policies which have restricted US exports. Below the brand new commerce agreements, the US is in search of elevated market entry for its agricultural merchandise, particularly soya and corn – two of its high export gadgets to China.
Amid the chance of a protracted commerce tussle with China, the US take care of India is probably going to make sure better market entry for these two merchandise. Moreover, the US can also safe improved entry for its apples.
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A NITI Aayog working paper in Might acknowledged that India might supply some concessions on “soybean oil imports” to scale back the commerce imbalance, with out harming home manufacturing. India is the biggest importer of edible oil globally, and the US has a surplus of soybean exports.
“We must also discover the choice of importing soybean seed and utilizing it for extracting oil in coastal areas, then promoting the oil within the home market and exporting the meal, for which there’s satisfactory abroad demand. It will keep away from genetically modified (GM) feed coming into the Indian market,” the paper, authored by Senior Adviser at NITI Aayog Raka Saxena and Member Ramesh Chand, mentioned.
“Equally, corn could also be imported for ethanol mixing, and its by-products – like Distiller’s Dried Grains with Solubles (DDGS) – could be fully exported to keep away from GM feed within the nation. US corn is cheaper and can be utilized to fulfill India’s biofuel targets with out disrupting native meals and feed markets,” it mentioned.
Notably, soybeans and corn are among the many high exports of US to China and in keeping with a Reuters report, US soybean exports might drop 20 per cent and costs might plunge if the US-China commerce dispute stays unresolved.
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Bourbon whisky & cars
If the commerce settlement with the UK is any indication, India is prone to open its extremely protected vehicle and alcoholic beverage sectors to the US, its largest commerce companion. Even earlier than negotiations with the US started, India slashed duties on bourbon whisky to 50 per cent from the sooner 150 per cent. Bourbon whisky is primarily produced within the US, with about 95 per cent made in Kentucky.
Below the UK deal, India minimize tariffs on automotive imports from over 100 per cent to 10 per cent – though the discount is phased over 10 to fifteen years. The same, if no more beneficial, deal may very well be provided to the US. President Donald Trump had beforehand acknowledged that prime tariffs in India made it troublesome for firms like Harley-Davidson to function within the nation.