Despite recent optimism from Washington and New Delhi, a full-fledged trade deal between India and the United States is unlikely to be concluded before US President Donald Trump’s expected visit later this year, according to Jayant Dasgupta, former Indian ambassador to the World Trade Organization (WTO).
“These are the kinds of issues that cannot be resolved very quickly,” Dasgupta said, pointing to persistent gaps in areas such as non-tariff barriers, rules of origin, and customs facilitation.
While an early, limited deal on goods may be possible, sticking points remain, particularly in sectors sensitive to Indian religious and cultural norms. Dasgupta cited US dairy and poultry products as examples. “The milch cattle there are fed the entrails of certain animals… That may cause problems here due to various religious reasons,” he said, adding that India is insisting on specific certification requirements that the US considers unfair trade barriers.
Another hurdle is the issue of rules of origin, which require exporters to prove a certain amount of domestic value addition. Dasgupta described the process as “cumbersome” and expensive, and said while the US has raised objections to India’s requirements, “we also face similar problems in other markets.”
There is, however, room for a narrower goods agreement. India could consider lowering its average applied tariff from about 14% to 10%, in line with the baseline rate the US imposed under Trump. But Dasgupta made clear that such a deal would be “a one-off” and not a comprehensive free trade agreement.
Dasgupta also pointed out that India is seeking “forward MFN” treatment from the US — meaning any future concessions India gives to another country would automatically extend to the US as well and vice-versa. However, the US under Trump has shown little interest in mutual concessions. “It has been only a one-way traffic,” he remarked. “Other countries should reduce their tariffs to accommodate what they have enjoyed so far with respect to the US’s low tariffs.”
Still, Dasgupta believes a partial agreement is achievable. He said India has reportedly made offers on around 90% of the more than 12,000 tariff lines in play, leaving only a small fraction where duties might remain or be phased out over time.
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On the procedural front, India is well-placed to move quickly if the political will exists. “We don’t have to go to the Parliament to get approval. We get a Cabinet clearance, sign the deal, and then… it is laid on the table of Parliament for information,” Dasgupta explained, suggesting that a limited deal could be wrapped up before the July 8 deadline.
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US President Trump recently said negotiations with India were “coming along great,” and expressed hope of sealing a deal soon. But based on the current pace and scope of talks, Dasgupta’s assessment indicates that a comprehensive bilateral trade agreement may still be some distance away.
Watch accompanying video for entire conversation.