India and the United States are making significant progress toward a phased bilateral trade agreement that could see an interim pact finalized before July’s tariff deadlines. The proposed India-US trade deal, currently structured in three implementation phases, aims to address market access for manufactured goods and agricultural products while navigating complex tariff disputes. Government sources reveal the initial phase may establish frameworks for goods trade, digital commerce, and services before autumn, with sensitive sectors like agriculture potentially protected through import quotas or minimum pricing mechanisms.
While negotiations for the India-US trade deal continue, uncertainty remains regarding the Trump administration’s acceptance of the three-phase approach. Indian Commerce Minister Piyush Goyal’s recent Washington visit yielded positive discussions with US counterparts, though neither government has issued official statements. The urgency stems from impending July tariffs that could impose 26% additional duties on Indian textiles, leather goods, and other labor-intensive exports unless exemptions are secured.
Parallel to these developments, Bangladesh finds itself at a critical juncture in US trade relations. The Office of the US Trade Representative has formally requested written proposals from Dhaka regarding countervailing duty negotiations, with Ambassador Jamieson Greer confirming readiness to begin formal talks upon receipt. This comes after Bangladesh’s trade adviser outlined measures to reduce the US trade deficit, signaling both nations’ willingness to engage despite not yet achieving the strategic depth of the emerging India-US trade deal.
The proposed India-US trade deal’s first phase focuses on immediate tariff relief, with India seeking concessions for key export sectors including gems, seafood, and garments worth approximately $41 billion in annual trade surplus. Conversely, US demands center on greater access for industrial goods, electric vehicles, and agricultural products—a sticking point given India’s restrictions on genetically modified imports. These tensions reflect broader challenges in the India-US trade deal negotiations, where non-tariff barriers and domestic industry protections remain contentious.
As the India-US trade deal progresses through its second phase this autumn—potentially coinciding with a Quad summit—discussions will expand to include previously identified priority sectors. The final comprehensive agreement, requiring US Congressional approval, may not materialize until late 2025, reflecting Washington’s cautious approach compared to New Delhi’s urgency. Meanwhile, Bangladesh’s parallel negotiations with the US could establish alternative frameworks for South Asian trade engagement, though currently lagging behind the advanced India-US trade deal timeline.
The strategic implications of these negotiations extend beyond bilateral commerce. With the US maintaining India’s position as its largest trading partner for four consecutive years ($131.84 billion in 2024-25), the India-US trade deal could reshape regional supply chains. Bangladesh’s simultaneous engagement suggests recognition of shifting trade dynamics, though its ability to secure comparable concessions remains uncertain without the economic leverage India commands. As global trade realigns, these parallel negotiations will test both South Asian nations’ capacities to navigate complex economic diplomacy amid geopolitical currents.
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