India-US Trade Deal '99% Done' as Modi-Trump G7 Meeting Looms

India and the United States have concluded a four-day negotiating round in New Delhi with both sides reaffirming their commitment to a Bilateral Trade Agreement, and officials briefed on the talks saying as much as 99 percent of the deal is now settled. After years of false starts, the characterisation of the pact as all but complete marks a significant advance in one of the world's most consequential trade relationships.

The optimism is tempered, however, by the nature of the unresolved portion. In trade negotiations, the final fraction is rarely the easiest, and the issues still outstanding between New Delhi and Washington are precisely the ones that have proved intractable for the best part of a decade.

What the deal would deliver

Under the framework taking shape, Washington would cut its reciprocal tariff on Indian goods from 25 percent to 18 percent, a meaningful easing for exporters in textiles, gems and engineering goods. A seven-percentage-point reduction in tariffs would directly improve the competitiveness of Indian products in the US market, lowering the price disadvantage that has weighed on key labour-intensive export sectors.

For industries like textiles and gems, which support large workforces and are sensitive to price, even incremental tariff relief can translate into meaningful order flows. Engineering goods, a fast-growing slice of India's export basket, would similarly benefit, making the prospective deal a tangible boost for some of the country's most employment-heavy export categories.

The familiar sticking point

The remaining one percent is the hardest. Agriculture, genetically modified crops and dairy market access have blocked an India-US trade pact for years, with New Delhi reluctant to open sectors that support tens of millions of smallholder farmers. These are not merely economic questions but deeply political ones, touching the livelihoods of a vast rural constituency that no Indian government can easily disregard.

Dairy in particular is a sensitive frontier, both for its scale as a source of rural income and for cultural and dietary considerations around imported products. Genetically modified crops raise their own regulatory and public-sentiment hurdles. These are the issues that have repeatedly stalled negotiations, and clearing them will require political will as much as technical compromise.

• Four-day negotiating round concluded in New Delhi.
• Officials say as much as 99 percent of the deal is settled.
• US reciprocal tariff on Indian goods would fall from 25% to 18%.
• Textiles, gems and engineering goods are key beneficiaries.
• Agriculture, GM crops and dairy access remain unresolved.

A leaders' meeting in the wings

Attention now turns to the G7 summit in France, where Prime Minister Narendra Modi and President Donald Trump are expected to meet in person. A leaders' handshake could provide the political cover needed to close the outstanding issues. Difficult final compromises in trade deals are often unlocked at the highest level, where leaders can make the politically sensitive concessions that negotiators cannot.

A face-to-face meeting offers both an opportunity and a deadline. The summit setting creates momentum and a natural moment for an announcement, but it also raises the stakes: a meeting that fails to bridge the final gap could just as easily stall progress as accelerate it. The dynamic between the two leaders will be closely watched.

A finalised deal would be a relief for markets that have been rattled by tariff threats and the related weakness in the rupee through much of 2026. Removing the overhang of tariff uncertainty would support exporter confidence and could ease pressure on the currency. With the bulk of the agreement reportedly done, the coming weeks, and the G7 encounter in particular, will determine whether the last and hardest one percent can finally be bridged.

The NE Times View

In trade talks the last one percent is the entire negotiation. Agriculture and dairy are unresolved precisely because they touch the livelihoods of millions of Indian farmers, and no G7 photo-op should pressure Delhi into conceding that floor for the optics of a signed pact. A deal that protects manufacturing access while shielding the rural economy is worth waiting for; a rushed one is not.

This article is original commentary and analysis by The NE Times. Background facts were referenced from Deccan Herald, Trading Economics.