A potential comprehensive trade deal between the United States and India could be transformative: economists from Bloomberg predict India’s goods exports to the US could almost double within a decade, boosting GDP by approximately 0.6%
📈 How Would It Work?
- Goods exports: Expected to rise nearly 100%, particularly in textiles, furniture, toys, and light manufacturing
- Total exports: Including services, exports to the US could grow by 64%
- Economic spike: This surge would drive a 0.6% increase in India’s GDP over time
⚠️ What’s at Stake?
- Tariff deadlines: Talks aim to finalize before the July 9 deadline to avoid reciprocal tariffs rising to 26%, which could hurt exports by up to 33% and reduce GDP by 0.7%
- Agriculture impasse: The US is pushing for access to dairy, poultry, corn, soy, and ethanol, but India is resisting to protect domestic farmers—agriculture remains the major sticking point
🌍 Why This Matters Now
- Strategic timing: With the 90-day tariff pause set to expire soon, both governments are racing to strike the deal
- Manufacturing windfall: A fair deal positions India as an attractive export hub for global supply chain shifts
- Economic resilience: The Finance Ministry flags the deal as a way to convert global headwinds into tailwinds reuters.com.
🔮 Outlook & Next Steps
- Final negotiations are underway; key differences in agriculture and autos remain to be resolved
- Interim agreement likely before July 9, with follow-up rounds expected for sensitive sectors
- Economic benefit: Even a limited deal could trigger export growth and GDP gains, but failure could mean tariff hikes and losses.
✅ Bottom Line
The US–India trade deal boost GDP 0.6% headline captures big economic potential—doubling goods exports and lifting GDP. But until political challenges (especially in agriculture) are solved, the outcome remains uncertain. Whether it’s a “turning point” or missed opportunity depends on successfully closing key deals by early July.
