Commerce Secretary Howard Lutnick said he’s “very optimistic” about prospects for a trade deal between the US and India, suggesting an agreement could come before a July deadline for higher tariffs.
“You should expect a deal between the United States and India in the not-too-distant future,” Lutnick said at the U.S.-India Strategic Partnership Forum’s Leadership Summit in Washington. “We’ve found a place that really works for both countries.”
India was one of the first countries to begin negotiating a trade deal with the U.S., hoping to avert President Donald Trump’s reciprocal tariffs, which are scheduled to kick in on July 9.
A team of U.S. Officials are expected to visit New Delhi on June 5-6 to advance the talks.
Lutnick said India may get more favorable terms from being one of the first pacts agreed.
“Earlier countries get a a better deal, that’s the way it is” Lutnick said. “So those who come in July 4th to July 9th, there’s just going to be a pile,” adding that India is trying to come in earlier than that.
New Delhi is discussing a three-tranche trade pact with Trump officials, Bloomberg News reported last month, with the first stage likely to cover areas including market access for industrial goods, some farm products, and non-tariff barriers.
Recently, India has adopted a tougher negotiating stance in its talks with the U.S. In the wake of legal challenges to the trade policies. New Delhi is pushing to scrap the 10% baseline tariff and wants Washington to ease the threshold for the proposed rules of origin.
Lutnick said both the nations are discussing bringing tariffs “down to a level that is reasonable and appropriate” to bolster trade with each other. Reducing the U.S. Trade deficit with India is also a key issue in the discussions, he said.
“I will treat you incredibly kindly on the things that are important to you, and you bring down tariffs and give us market access. And let’s find a proper place in the middle,” Lutnick said.
Trump-Modi bond
The commerce secretary referenced the strong personal relationship between Trump and Prime Minister Narendra Modi as helping create an “easy path to trade negotiations.” He implied, erroneously though, that Modi was elected directly by citizens of the country, like Trump. India has a parliamentary system of government, where the prime minister is chosen by the legislature.
In the last few months, Modi has been trying to appease Trump by offering concessions on some American goods and pledging to reduce tariffs. The two leaders have signaled plans to boost trade between the two countries to $500 billion by 2030, up from $127 billion in 2023.
India has also pledged to buy more weapons, oil and gas from the U.S. To lessen the imbalance in bilateral commerce.
“There were certain things that the Indian government did that generally rubbed the United States the wrong way. For instance, they generally buy military gear from Russia,” Lutnick said. But Trump believed in raising concerns and “the Indian government is addressing it specifically and directly,” he added.
