US-India Trade Deal Close, Pakistan Talks Next, Says President Trump

International News: US President Donald Trump announced that the United States is on the brink of finalizing a significant trade deal with India, marking a pivotal moment in bilateral economic relations. Speaking at Joint Base Andrews, Trump also revealed that a Pakistani delegation is set to visit Washington next week to negotiate tariff reductions, as Pakistan faces potential 29% tariffs on its exports due to a $3 billion trade surplus with the US. These developments follow Trump’s controversial claim of using trade leverage to broker a ceasefire between India and Pakistan after the April 2025 Pahalgam attack and India’s Operation Sindoor. While India denies US mediation in the ceasefire, the trade talks signal a strategic push to strengthen economic ties with both South Asian nations.

Progress on US-India Trade Negotiations

The US-India trade deal, described by Trump as “very close” to completion, aims to address the $45 billion US trade deficit with India. Trump has previously criticized India’s high tariffs, calling it a “tariff abuser,” and imposed 27% tariffs on Indian goods in April 2025, with a 90-day pause ending July 9. India’s Trade Minister Piyush Goyal, leading a delegation to Washington since May 16, is pushing for a “zero-for-zero” approach, offering to make 90% of US exports tariff-free, excluding autos and agriculture. India has already lowered tariffs on US products like Bourbon whiskey and motorcycles. A unique “forward most-favoured-nation” clause is under consideration, ensuring the US receives any better tariff terms India grants to other nations, a rare concession aimed at “future-proofing” the deal. Indian officials emphasize mutual benefits, with Foreign Minister S. Jaishankar stating, “Nothing is decided till everything is,” countering Trump’s claim of a no-tariff offer. The deal could allow US companies to bid for over $50 billion in Indian government contracts, boosting economic ties.

Pakistan Tariff Talks and Regional Dynamics

Trump’s announcement of upcoming talks with Pakistan underscores his administration’s focus on balancing trade relations in South Asia. Pakistan’s $3 billion trade surplus has prompted proposed 29% tariffs, spurring urgency for negotiations. The delegation’s visit follows heightened tensions after India’s Operation Sindoor, a counterstrike against terror infrastructure in Pakistan post-Pahalgam attack. Trump linked trade incentives to the ceasefire, claiming his administration averted a “potential nuclear war” through economic leverage, a narrative India disputes, insisting the truce was bilateral. Pakistan’s Prime Minister Shehbaz Sharif has expressed openness to discussing water resources and Kashmir, though India remains firm against third-party mediation. The talks aim to stabilize economic relations, but Trump warned that continued conflict could derail deals with both nations, emphasizing peace as a prerequisite for trade.

Geopolitical and Domestic Implications

The trade negotiations occur amid complex geopolitical dynamics. India’s rejection of Trump’s mediation claims reflects its sensitivity to external involvement in bilateral issues, particularly Kashmir. The Congress party in India has demanded clarity, questioning if diplomatic channels with Pakistan are reopening. Economically, India’s 6.5% growth projection for 2024-25 and $130 billion trade with the US in 2024 underscore the stakes. For Pakistan, tariff relief is critical to maintain export competitiveness. Trump’s strategy leverages trade to foster stability, but India’s domestic political climate and strategic priorities may limit broader concessions. As talks progress, the outcomes could reshape South Asian economic and diplomatic landscapes.