‘Very big one’: Donald Trump hints at trade deal with India after China pact | India US Trade Deal Latest News Updates

US and Indian trade negotiators are in final talks for a potential "very big" trade deal ahead of the July 9 reciprocal tariff pause deadline, with President Trump expressing optimism despite previous limited progress. Key sticking points include US demands for greater market access for agricultural products like soya and corn, and India's high duties, while the US lacks a valid Trade Promotion Authority (TPA) which limits its ability to reduce tariffs. India is considering concessions on soybean oil imports and increasing US oil/defense procurement to bridge the trade imbalance, but the absence of TPA raises questions about the deal's long-term scope and durability.

Analysis

Final-stage trade negotiations between the US and India are proceeding under pressure, with a July 9 deadline for a reciprocal tariff pause looming. While President Trump has signaled the possibility of a "very big" deal to "open up India," progress has been limited in previous rounds due to persistent sticking points. The core of the negotiation involves US demands for greater market access for agricultural products, specifically soya and corn, which contrasts with India's high duties and non-tariff barriers. A significant structural impediment is the current US administration's lack of a valid Trade Promotion Authority (TPA), which legally prevents it from reducing tariffs and raises questions about the long-term durability of any potential agreement. To bridge the trade gap, India is reportedly considering concessions on soybean oil imports and is already increasing its procurement of US energy. This is evidenced by official data showing India's crude oil imports from the US rose 11.49% to $63 billion in March 2025, a trend likely to continue given India's strategic interests and rising oil import dependency, projected to hit 90% in April 2025.

Key Decisions for Investors

• Investors should closely monitor commodity funds tied to soybeans (SOYB), corn (CORN), and crude oil (USO, UCO), as a successful deal would create a significant positive demand signal for these US exports to the large Indian market.
• It is critical to weigh the optimistic political rhetoric against the material risk posed by the US's lack of a Trade Promotion Authority (TPA), which could severely limit the scope and durability of any agreement, potentially leading to market disappointment.
• Given the approaching July 9 deadline, traders should be prepared for increased volatility in related assets, as any news, positive or negative, from the final round of talks could cause sharp price movements.