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BUSINESS & TRADE JULY 11, 2025 | The Indian Eye 36

India-US Trade Talks Hit

Turbulence as Markets Watch

and Vietnam Lessons Loom

OUR BUREAU
New Delhi/Washington, DC

ith the July 9 deadline approaching, a
possible India-US trade deal faces hur-
Wdles, keeping Indian markets cautious
and policymakers alert to lessons from Vietnam’s
recent experience.
As the July 9 deadline for the pause on recip-
rocal tariff hikes between India and the United
States draws near, financial markets and trade ne-
gotiators are moving with a mix of anticipation and
caution. Although US President Donald Trump has
stated that a trade deal with India is “likely soon,”
persistent disagreements—especially around agri-
culture—are testing the resilience of bilateral talks.
Indian stock markets reflected this uncertain-
ty on Thursday. The Nifty 50 and Sensex opened
with modest gains, but profit booking and global
volatility capped further upside. By the end of the
trading session, the Nifty had dipped 0.19 per cent,
and the Sensex was down by 0.20 per cent. Experts
attributed the caution to investor unease about
the yet-to-be-finalized Bilateral Trade Agreement
(BTA) with the US.
Ajay Bagga, a market expert, remarked, “We
are in the last five days of the US tariff deadline.
Most trade deals have stalled over hardening po-
sitions. We expect either a postponement or a As the United States pursues its “America First” trade strategy under President Trump, it has intensified efforts to strike bilater-
universal tariff of 10 to 20 per cent.” The specter
of tariffs reinstating to 26 per cent looms large if al agreements with key global partners (Agency Photo)
negotiations fail.
As the United States pursues its “America First” Washington in a bid to reach a last-minute compro- lar market sentiments, stating, “FIIs have turned
trade strategy under President Trump, it has inten- mise, New Delhi has grown firmer on agricultural cautious due to premium valuations and global
sified efforts to strike bilateral agreements with key concessions. A senior Indian official warned that uncertainty. The trade deal outcome will be a key
global partners. In recent months, Washington has failure would reimpose previously suspended du- factor determining near-term trends.” While opti-
signed or initiated trade deals with countries like ties, first introduced by the Trump administration. mism remains buoyed by a weakening US dollar
Vietnam, the United Kingdom, and Japan, aiming Against this backdrop, the recent US-Vietnam and strong earnings expectations, volatility could
to secure better access for American goods and trade deal has emerged as both a cautionary tale spike as the July 9 cutoff nears.
reduce perceived trade imbalances. The Vietnam and a strategic blueprint. Though it offers US goods US officials, however, remain upbeat. State
deal, for instance, granted duty-free access to US duty-free access to Vietnam, it slaps a flat 20 per Department Deputy Spokesperson Mignon Hous-
exports while imposing a flat 20% tariff on Viet- cent tariff on all Vietnamese exports to the US— ton reaffirmed India’s status as a vital Indo-Pacific
namese goods entering the US — a move that undermining two decades of concessional trade partner. “We want trade that is fair and reciprocal,”
signals Washington’s assertive negotiating style. since 2000. The move sparked concern in India, es- she said, defending the Trump administration’s
Similar deals are being discussed with countries pecially among exporters who view Vietnam as both tariffs as a tool to address long-standing inequities.
in Southeast Asia and Latin America as the US a competitor and partner in regional value chains. She also emphasized the strategic importance of
seeks to counter China’s influence in global trade A Global Trade Research Initiative (GTRI) the deal for the broader ‘America First’ agenda.
networks. These pacts reflect a broader shift away report pointed out that such abrupt reversals, The upcoming days will be critical not only for
from multilateral agreements like the Trans-Pacific blanket tariffs, and ambiguous transhipment India’s trade policy but also for market direction
Partnership (TPP) toward tightly controlled, recip- rules—Vietnamese goods transiting from Chi- and investor sentiment. If a deal materializes, it
rocal deals. For India and others, these deals serve na now face a 40 per cent duty—could severely could lift Indian equities, stabilize the rupee, and
both as precedents and pressure points in ongoing damage export-led growth. The report warns In- open new avenues for US-India economic engage-
trade negotiations with Washington. dian negotiators to tread carefully and learn from ment. If it fails, both sides may retreat into a more
While Indian negotiators, led by Chief Nego- Vietnam’s policy shocks. protectionist stance—with markets bearing the
tiator Rajesh Agrawal, have extended their stay in Vinod Nair of Geojit Financial echoed simi- brunt of renewed tariffs and political fallout.

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