Stars look favourably aligned for an early US-India trade deal amid China tensions: GTRI

New Delhi [India] October 15 (ANI): The United States appears to be warming up to the idea of a comprehensive trade deal with India as Washington seeks to diversify critical supply chains away from China. With Beijing tightening its grip over rare-earth exports and the US-China trade war intensifying, policymakers in Washington are reportedly looking to strengthen economic ties with reliable partners, including India, according to the Global Trade Research Initiative (GTRI).
"China's tighter control over rare-earth exports and a deepening US-China trade war are forcing Washington to rethink its strategy with allies as it seeks reliable partners to build alternative supply chains," noted GTRI founder Ajay Srivastava.
According to the think tank, this reassessment could "accelerate a trade deal with India, with the US likely offering 16-18 per cent tariff access, higher than the 15 per cent for the EU and Japan but below the 20 per cent for Vietnam."
GTRI believes that deal could move faster than expected as the US is keen to conclude an agreement that would reduce its dependence on China and solidify economic engagement with India. "The deal may move quickly because Washington wants it," GTRI observed, adding that such an accord could "give India relief from the 50 per cent tariffs now hurting its exports."
However, GTRI cautioned that India must protect its core interests during negotiations. "India must hold firm on its red lines in agriculture, digital trade, e-commerce, and intellectual property, and avoid any anti-China clauses that could limit its strategic autonomy," GTRI said.
India's stance on data localization, subsidies, and intellectual-property protections could be key sticking points in any trade negotiation. At the same time, the US is likely to press for deeper market access in sectors such as medical devices, dairy, and technology services.
The emerging consensus between New Delhi and Washington comes amid broader geopolitical shifts. With supply chain security becoming a central focus of US trade policy, India's large domestic market and growing manufacturing base have made it an attractive partner.
Separately, GTRI noted that currency markets reflected optimism over the potential trade breakthrough. The Indian rupee traded around Rs 88.25 on Tuesday, after touching Rs 87.75 early in the session, compared with Rs 88.76 at Monday's close. The sharp intraday movement suggests "heavy dollar selling by the Reserve Bank of India (RBI), likely aimed at curbing volatility ahead of Diwali, when inflation sensitivity runs high," GTRI said.
The think tank added that the RBI may also be "positioning for a possible US-India trade deal, which could boost dollar inflows by reviving Indian exports to the US."
The trade pact could mark a turning point in bilateral economic relations and help both nations reduce dependence on China-linked supply networks. (ANI)