India US Trade Deal: $500 Billion Target Set by 2030 Amid Tariff Tension

Reuters recently reported that the India US trade deal initiated the first phase of the trade agreement with India. Both countries have joined hands to become global trade partners for the bilateral exchange of goods, aiming to trade over $500 billion by the end of the year 2030.

The new tariff implications imposed on India by the US was a setback for the traders of India who were involved in trade of export and import of goods, as well as the traders of the stock market who have invested in various companies trades globally. The implications for tariff in India are 26 percent on Indian goods at the beginning of the month. However, US President Donald Trump has paused the tariff increments for 90 days for now.

In reciprocation, India has reduced the tariff rate applied on 8,500 American based products of multiple categories such as cosmetic industries to automotive sectors.

Side effects of Trump’s new tariff policies

 US: Manufacturers of semiconductors are the ones who suffered the most by this decision of the US Precedent as China is the main supplier for the equipment of semiconductors.

Other than that, the stock market faced the downfall in S&P 500by 0.2% and Dow Jones Industrial Average decreased over 150 points (0.4% approx.), also Nasdaq fell (0.1% approx.).

 India: Information technology, electronic and automotive industrial sectors being one of the affected sectors have damped revenue due to the new tariffs policy. Also, Nifty 50 dropped by 743 points and BSE Sensex fell 2,200 points in a day.

India’s “MISSION 500” for India US Trade Deal

 India’s PM Narendra Modi ambition to increase the trade volume in the global market. Attempting to hold its position as an important part of the global supply chain as the US tries to diversify besides China, India may take advantage of the opportunity.

 The process will result in zero-duty import fees for certain sectors, including energy, technology, minerals, and manufacturing. Production Linked Initiative Scheme may apply.

Friction in trade between India US Trade Deal and China

US hike in tariffs implications on China based products whooping it to 54 per cent and then surged up to 145 per cent. China responded with raising the US imported products to 125 percent with additional restrictions on natural minerals.

Can India take advantage of this new tariff policy?

 For now, India will not face any direct consequences of these increased tariff rate yet because of the 90 days pause provided by the Us President Donald Trump, India can take this opportunity and its plan of action accordingly. As China and US both are not able exchange commodities to each other, India can become the new mediator between these two superpower countries and establish its own strong role in the global economy.

For more details on MISSION 500, click here.

Conclusion

The evolving India US trade deal signals a transformative moment in global commerce. With a shared vision of surpassing $500 billion in bilateral trade by 2030, both countries are recalibrating policies to strengthen economic ties. The temporary pause in US tariffs and India’s tariff cuts on thousands of American products create a favorable environment for trade expansion.

Meanwhile, disruptions in the US-China trade dynamic offer India a timely opportunity to emerge as a key global player. Initiatives like “MISSION 500” and incentives under schemes like PLI could help India solidify its place in the global supply chain. While markets have reacted with volatility, the long-term outlook appears optimistic, especially if diplomatic negotiations continue to favor open trade.

As India balances diplomacy with strategy, this trade collaboration may set the tone for a new chapter in international economic relations. The next 90 days will be critical in shaping outcomes and setting the groundwork for sustainable global trade growth.

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