Key points:
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Commerce Secretary Lutnick says a deal is “done” but awaits approval from foreign leaders.
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Treasury Secretary Bessent says India is “very close” to finalising a trade agreement.
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Market rallied on the news as business confidence remains shaken by recent tariffs.
The Trump administration has hinted that its first major trade deal following last month’s sweeping tariff hikes is nearing completion—with India emerging as the most likely partner.
Speaking from Arizona on Tuesday, Commerce Secretary Howard Lutnick told CNBC that a deal is “done, done, done, done” but still requires approval from the unnamed country’s leadership.
“I need to wait for their prime minister and their parliament to give its approval, which I expect shortly,” Lutnick said.
He declined to name the country but clarified that he is not handling China talks, which remain under the purview of Treasury Secretary Scott Bessent.
The remarks immediately boosted market sentiment, with major indices rising to session highs amid hopes of easing trade tensions.
All signs point to India
Multiple senior officials, including President Donald Trump and Treasury Secretary Scott Bessent, have separately indicated that India is closest to finalising a deal. Trump said Tuesday that “we’ll have a deal with India,” following Prime Minister Narendra Modi’s visit to Washington in late February.
“India, in a funny way, is easier to negotiate with than many other countries,” Bessent told reporters at the White House. “They have high tariffs, but fewer non-tariff barriers, no currency manipulation, and very limited subsidies.”
Bessent noted that the talks have been “relatively smooth”, especially compared to the more complex negotiations with partners like Japan and South Korea, which are also underway.
Vice President JD Vance recently visited India and reportedly made “very good progress” with Modi, Bessent said.
If finalised, the deal could spare India from the looming 26% reciprocal tariff on its exports to the US, which is set to take effect on 8 July unless an agreement is reached.
Strategic and economic backdrop
India accounted for nearly 3% of all US imports as of February, with a 2024 trade deficit of US$45.7bn, according to Census Bureau data. A deal would represent a major milestone in the administration’s attempt to restructure global trade on reciprocal terms.
While not confirmed, the likely contours of the agreement include tariff reductions, access for US energy and defence exports, and a roadmap to improve non-tariff transparency. The US has consistently urged India to reduce duties on American goods while expanding market access.
Markets watching closely
Last month, the administration imposed universal tariff hikes, which triggered market volatility and a steep drop in business confidence. Tariffs on Chinese goods were raised to over 100%, while dozens of other countries have been negotiating for exemptions or bilateral deals.
The White House says it has 17 trade agreements “in motion”, with India poised to be the first success story. Whether it will ease the broader anxiety remains to be seen.
“We’re trying to set a model,” Bessent said, “and India may be the first one to step forward.”
