Who Benefits from the US-India Trade Deal?

In Business
July 2, 2025
Pankaj Gupta
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The US India Trade Deal is set to redefine economic ties between the world’s largest democracies, targeting $500?billion in trade by 2030. Anchored in tariff cuts, digital data flow agreements, and mutual market access, the deal offers major gains for agribusiness, IT services, and manufacturing—while raising stakes for farmers and generics. Backed by expert insights and global benchmarks, this report breaks down what’s at stake and what lies ahead.

New Delhi (ABC Live): The US-India trade deal targets a leap from $129.2?billion in goods trade in 2024 to $500?billion by 2030. In 2024, the U.S. exported $41.8?billion worth of goods to India and imported $87.4?billion—resulting in a $45.7?billion goods deficit—and India shipped $33?billion in services to the U.S..

Key Provisions of the US-India Trade Deal

Tariff Liberalization
- Zero?for?Zero Swap on 90?per cent of India’s ?12,000 tariff lines, phased over 12?months.
- 10?per cent Fallback Cap on residual lines post?July?9,?2025, instead of reverting to 26?per cent reciprocal duties.
Agriculture & Dairy Access
- Expanded TRQs: In?quota duties under 10?per cent for up to $8.2?billion in U.S. dairy (butter, cheese, powdered milk) and $3?billion in tree?nut exports.
- Pilot protocol for GM corn & soy feedstock, pending science?based approvals.
Non?Tariff Barrier Reforms
- Binding SPS/TBT timelines: Certification in 30?days, appeals within 60?days.
- Streamlined customs: Pre?arrival clearances cut average clearance time by 25?per cent.
Digital Trade & Data Flows
- Carve?outs for India’s data-localisation rules affecting 1.2?million IT/BPM jobs.
- “Data?Free Flow with Trust” commitment: Cross?border transfers for 80?per cent of digital services transactions.
Intellectual Property & Procurement
- Five?year data exclusivity for pharmaceuticals, affecting an estimated $5?billion in annual generics sales.
- MFN access to central and high?value state procurements (above $100?million), with carve?outs for 100,000 SMEs under “Make?in?India.”
Dispute?Settlement Mechanism
- Expedited arbitration: Panel constituted within 45?days; provisional remedies within 90?days.

Who Wins—and Loses?

Winners
- U.S. Agribusiness: Potential +25?per cent export growth in dairy and nuts, tapping into India’s $9?billion annual market.
- Indian IT & Services: $33?billion in 2024 services exports could grow 15?per cent with eased data rules.
- Manufacturers: 0–5?per cent duties on capital goods (machinery, chemicals) reduce input costs by 10–15?per cent.
At?Risk
- Small?Scale Indian Farmers: Up to 80?million dairy producers face greater U.S. competition.
- U.S. Generics: Stricter data exclusivity may delay entry of $2–3?billion in annual generic drug exports.

Timeline & Next Steps

July?9,?2025: Interim BTA deadline—failure reinstates a 26?per cent U.S. tariff unless a 10?per cent cap is locked in.
Late?2025: Full?FTA talks begin, tackling sensitive agriculture (~$50?billion in farm trade), autos, and IP chapters.
2026–2030: Phased implementation with safeguard quotas and a $1?billion adjustment fund for affected stakeholders.

Data Appendix

Indicator	2024	2023
U.S. goods exports to India	$41.8?bn	$40.4?bn
U.S. goods imports from India	$87.4?bn	$83.7?bn
Total bilateral goods trade	$129.2?bn	$124.1?bn
U.S. trade deficit with India	$45.7?bn	$43.3?bn
India’s services exports to the U.S.	$33?bn	$31?bn
India’s avg. Applied MFN tariff	5.83?%	5.83?%
Duty?free lines in India’s schedule	18.12?%	18.12?%
U.S. reciprocal tariff (suspended)	26?%	—
Proposed U.S. baseline tariff (post?deal)	10?%	—

Expert Perspectives

Scott?Bessent (U.S. Treasury Secretary)
“We are very close with India” on finalising a trade agreement that reduces punitive duties and safeguards U.S. export interests reuters.com.
India’s Finance Ministry
“A successful U.S.–India trade pact could flip headwinds into tailwinds, energising exports and balancing our $131.8?billion relationship”, ft.com.
Reuters Poll of 51 Economists
Missing the July?9 deadline could trigger downward revisions in India’s growth forecast, now at 6.4?per cent for FY?2025?26.
Mathias?Cormann (OECD Secretary?General)
“Prolonged policy uncertainty and higher trade barriers would erode growth and stoke inflation,” underscoring the urgency of an interim deal.

Competing Insights from Top Outlets

Financial Times highlights India’s commitment to boost U.S. natural gas imports—reducing a $41.2?billion surplus—and frames the interim pact as a precursor to a broader agreement by autumn ft.com.
Bloomberg News reports the Terms of Reference span 19 chapters, covering e?commerce, data storage, critical minerals, corruption, rules of origin, plus goods and services investing.com.
The Economic Times underscores the COMPACT program linking trade with defence and tech under the Vance?Modi roadmap, setting a diplomatic and strategic context economictimes.indiatimes.com.
India Today flags e?commerce and data-localisation as politically sensitive, with global tech giants pressing for retail and digital?rule reforms indiatoday. in.

Lessons from Other FTAs

USMCA?– Phased tariff cuts and strong dispute settlement boosted trilateral trade by 15?percent within three years.
CPTPP?– High?standard digital?trade and IP rules expanded member exports by $100?billion collectively in 2023.