Credit: CFP
AsianFin -- India could become the first country to secure a bilateral trade agreement with the United States, according to U.S. Treasury Secretary Scott Bessent.
Speaking on CNBC's Squawk Box, Bessent said India is leading progress in ongoing negotiations, citing the country's relatively open trade practices and fewer non-tariff barriers. "I would guess that India would be one of the first trade deals we would sign. So watch this space," he noted.
India currently faces a 10% tariff under existing U.S. trade policy, along with a proposed 26% "reciprocal" tariff that has been temporarily paused for 90 days, expiring July 8. The suspension is part of a broader effort by U.S. President Donald Trump's administration to rebalance trade terms and reduce the U.S. trade deficit.
Bessent contrasted India's cooperation with China's approach, calling on Beijing to de-escalate tensions. "They sell five times more to us than we sell to them," he said.
The Treasury chief also commented on Europe's economic outlook, suggesting the European Central Bank may consider rate cuts to counter the euro's recent strength.
His remarks follow U.S. Vice President JD Vance's visit to New Delhi earlier this month, during which he encouraged India to lower non-tariff barriers and boost imports of American energy and defense equipment.
A proposed U.S.-India trade agreement will span 19 sectors, including agriculture, e-commerce, data storage, and critical minerals, Bloomberg News reported on last Friday.
On last Monday, it was reported that Asian economies like South Korea, Japan, and India are taking the lead in trade talks with Trump's administration, while China pledges additional support for tariff-hit exporters.
The Trump administration's imposition of a 26% blanket tariff on Indian imports—higher than those on the EU, Japan, or South Korea—has sparked sharp market reactions and raised concerns over trade relations.
While the Indian stock market and rupee dipped following the announcement, the pharmaceutical sector was spared, providing some relief to key exporters. However, sectors like autos, IT, and general manufacturing face pressure from reduced competitiveness and demand.
Analysts estimate a modest 50 basis point GDP impact, though India's relatively small export exposure to the U.S. (1.1% of GDP) is expected to limit broader economic fallout. India is currently negotiating a trade deal with the U.S. to mitigate long-term effects.
