Key facts
- A U.S.-India trade agreement is anticipated to be signed within three to four months.
- Negotiations between the two countries are described as virtually completed.
- The primary remaining obstacle is the conclusion of U.S. Section 301 trade investigations.
- The U.S. has proposed tariffs on goods from 60 countries, including India, over forced labor concerns.
- Potential tariffs on generic drugs imported into the U.S. were announced by President Trump.
A senior U.S. official indicated on Wednesday that a long-awaited trade agreement between the United States and India could be signed within the next three to four months, suggesting that negotiations are nearly finalized. The official, speaking on condition of anonymity on the sidelines of the ASEAN Foreign Ministers' meeting in Manila, stated that the deal's completion is primarily delayed by Washington's ongoing Section 301 trade investigations, rather than unresolved bilateral issues.
These investigations focus on unfair trade practices and can lead to retaliatory measures, including tariffs. One such probe involving 60 countries is expected to conclude shortly, which the official believes will pave the way for progress not only with India but also in other regions. The U.S. has previously proposed tariffs of up to 12.5% on goods from numerous nations, including India, citing concerns over trade in products made with forced labor.
In a separate development, U.S. President Donald Trump announced that generic drugs imported into the United States would remain tariff-free for two years from August 1, after which they would face tariffs of 100% for a year, escalating to 200% thereafter. This move could significantly impact India's pharmaceutical industry, which relies heavily on the U.S. market, accounting for approximately 38% of its total pharmaceutical exports.