Niggling issues' in India-US mini-trade deal may get resolved in near future, says EAC-PM member Sanyal

Optimism on the Horizon for India-US Mini Trade Agreement

In a significant development hinting at progress in Indo-US economic engagement, Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister (EAC-PM), has expressed optimism that the minor or "niggling" issues hampering the finalisation of a long-discussed mini trade deal between India and the United States may soon be resolved.

The statement comes at a time when both countries are eager to expand strategic and economic ties amid shifting global trade dynamics and increasing focus on resilient supply chains.

'Very Minor Issues Left': Sanjeev Sanyal

Speaking at a recent policy forum, Sanyal remarked that while the major contours of the India-US mini trade deal have already been ironed out, a few residual issues—largely procedural or technical in nature—are still under discussion.

“The deal is largely done. Only a few niggling issues remain. These are not politically contentious but more about the technicalities of implementation. I believe we will see resolution soon,” Sanyal stated.

His comments offer a much-needed boost to trade analysts and businesses, many of whom have been closely watching the outcome of these talks for years.

What’s in the Mini Trade Deal?

Though neither side has disclosed the full contents of the proposed agreement, it is widely understood that the deal includes tariff reductions and improved market access in sectors such as agriculture, medical devices, and information technology. India is reportedly seeking concessions on steel and aluminum exports, while the US is keen to expand agricultural exports and ease restrictions on tech companies.

The deal had been under consideration since 2019 but was repeatedly delayed due to political transitions, the COVID-19 pandemic, and broader disagreements over digital trade and labor standards.

Market Analysts React Positively

Market analysts welcomed Sanyal’s comments, suggesting that the resolution of remaining issues could serve as a catalyst for renewed trade momentum between the two democracies.

“A successful conclusion to this mini trade deal would send a strong signal to global investors that both countries are serious about enhancing bilateral commerce,” said Dr. Radhika Pandey, economist at the National Institute of Public Finance and Policy (NIPFP).

“While the deal is small in scale, its strategic value is high—it lays the foundation for a more ambitious agreement in the future,” she added.

Strategic Significance Amid Global Shifts

The prospective deal also carries strategic weight, especially as both India and the US aim to reduce dependency on Chinese supply chains and establish more resilient trade partnerships. The US has been actively encouraging India’s role in initiatives such as the Indo-Pacific Economic Framework (IPEF), while India is also bolstering its manufacturing sector through schemes like ‘Make in India’ and the Production-Linked Incentive (PLI) program.

Trade between the two countries stood at approximately $128.6 billion in FY23, making the US India’s largest trading partner. However, the trade imbalance continues to be a sore point, with India enjoying a significant surplus.

Addressing the Roadblocks

Trade experts cite a few key hurdles that need resolution before the deal can be signed:

• Tariff Alignment: India’s import duties on certain agricultural products remain a point of contention.

• Digital Trade: India’s data localization rules and digital tax regime have faced criticism from US tech companies.

• Certification and Standards: Harmonization of product standards, especially in agriculture and pharmaceuticals, is also under negotiation.

Nonetheless, both governments have shown a willingness to find middle ground.

“Unlike earlier trade tensions, these issues are now seen through a more constructive lens. There is greater political will on both sides,” said Arun Kumar, former Assistant Secretary General at FICCI.

Investor Outlook: Renewed Confidence in Bilateral Trade

Investors and multinational firms are watching the developments closely. A finalized mini trade deal would likely create a more stable and predictable business environment, especially for sectors like e-commerce, agriculture, and advanced manufacturing.

Equity markets may respond positively if the deal is signed, particularly companies in sectors directly impacted by tariff adjustments or trade facilitation measures.

“Any breakthrough, however small, improves the outlook for US-India supply chain integration,” said Shreya Gupta, Senior Analyst at Nomura India. “We may see renewed capital inflows into related sectors.”

Small Deal, Big Implications

While the so-called “mini” trade deal may not drastically alter the India-US economic landscape in the short term, it holds considerable symbolic and strategic value. It reflects the increasing maturity of the bilateral relationship, especially in a world moving toward multi-polar trade frameworks.

Sanjeev Sanyal’s assurance that remaining issues are likely to be resolved soon could pave the way for finalisation in the coming months—potentially ahead of high-level diplomatic engagements expected later this year.

For both nations, this could mark a critical step toward building a modern, mutually beneficial trade framework that supports not just commerce, but deeper geopolitical alignment as well.