October 29, 2025
The India–U.S. trade negotiations are finally approaching a breakthrough. After months of back-and-forth, both sides have aligned on key tariff and technology issues — signaling that a “Phase 1” agreement may be signed in the coming weeks.
This deal isn’t just about trade flows. It’s about realigning global supply chains in an era where resilience, regional diversification, and cost competitiveness define success.
Our latest analysis shows clear momentum in industrial goods, semiconductors, and defense manufacturing, where tariff cuts and technology cooperation could reshape sourcing decisions across the Indo-Pacific. Sharp negotiation of using corn, soy from American Farmers for Ethanol production helps the administration it’s key farmers constituents. At the same time, energy collaboration — particularly around LNG and clean technology — could strengthen bilateral supply stability.
Still, challenges remain.
- Agriculture use of Corn and Soy is not likely to feature in this month’s agreement as India needs Non-GMO products with specific certification. American farmers do not produce enough of it to be of utility.
- Digital trade and data governance will take longer to align given policy sensitivities on both sides.
Based on recent developments, we estimate a 65–80 % probability that a partial agreement will be signed within the next month — a significant step toward restoring preferential trade access and enabling industry-specific tariff savings.
Summary of sector-wise probabilities and progress in the table below:
India–U.S. Trade Agreement Status (Update – 10-29-25)
| Category / Sector | Likely Contents / Issues | Status (10-29-25 update) | Probability of Inclusion / Resolution in Next 2–4 Weeks |
|---|---|---|---|
| Tariff Reductions (Manufactured Goods) | U.S. to reduce high tariffs on Indian metals/engineering; India selective reciprocation. |
Convergence on most issues; legal text being refined. | 80–90% (very high) |
| Agricultural Market Access | U.S. seeks dairy/poultry/almonds access; India maintaining domestic protections and sanitary standards. This will not be in Tariff Agreement at this time. |
Still the major sticking point; only limited movement. | 35–45% (low–moderate) |
| Energy Trade & Russian Oil Issue | India to moderate Russian crude purchases; expand LNG/energy cooperation with U.S.; India to change its Ethanol requirements from 2028 to 2026 allowing exports of U.S. agriculture to make Ethanol. |
Diplomatic understanding; implementation mechanics pending. | 60–70% (moderate–high) |
| ICT & Electronics Components | Tariff/standards alignment for semiconductors and telecom equipment; mutual recognition progress. |
Technical texts near-final; minimal open hurdles. | 75–85% (high) |
| Services & Digital Trade | Visa/work-permit flexibility for Indian IT; data flows and platform rules for U.S. tech firms. | Politically sensitive; incremental movement only. | 45–55% (moderate) |
| Pharmaceutical & Medical Devices | Faster U.S. recognition of Indian pharma facilities; stronger IP/quality harmonisation. | Likely to be included with technical annexes pending. | 55–65% (moderate–high) |
| Defense & High-Tech Trade Facilitation | Easing export controls for dual-use tech; deeper supply-chain alignment. | Strong momentum; few public blockers. | 85–95% (very high) |
| Non-Tariff Barriers & Standards | India will not agree to use of GMO Corn and Soy in dairy products. U.S. objections to India dairy certification/labels; India seeks recognition of conformity assessment. |
Active at WTO/bilateral fora; unresolved. | 25–35% (low) |
| Intellectual Property & E-Commerce | Stronger IP enforcement & digital rules sought by U.S.; India cautious to retain policy space. |
Principles agreed; detailed text pending. | 50–60% (moderate) |
| Timeline & Political Clearance | Leaders’ announcement window late Oct–Nov 2025; legal/technical drafting ongoing. |
Officials signal very near; sequencing & optics under discussion. | 65–80% (moderate–high) |
