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India-US Trade Agreement Talks Gain Momentum Amid Rising Indo-Pak Tensions

May 31, 2025 11:10 AM
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India-US Trade Agreement Talks Gain Momentum Amid Rising Indo-Pak Tensions


As tensions escalate between India and Pakistan following a deadly terror attack in Jammu and Kashmir, the United States is advancing toward a significant trade agreement with India. U.S. President Donald Trump on Friday confirmed that negotiations are in an advanced stage, while cautioning that any military conflict between the two South Asian rivals could derail the deal.

Trump’s statement came in response to the April 22 terrorist attack in Pahalgam, Jammu and Kashmir, which killed 26 people. India retaliated with a military offensive dubbed Operation Sindoor, targeting terror camps in Pakistan and Pakistan-occupied Jammu & Kashmir (PoJK). The operation involved missile strikes, drones, and fighter jets in one of the most intense confrontations in decades.

Addressing reporters at Joint Base Andrews, Trump remarked, “We’re very close to a major agreement with India. But if India and Pakistan go to war, I won’t be interested in any deal.” He also revealed that a Pakistani delegation is scheduled to visit the U.S. next week, suggesting parallel diplomatic efforts from Islamabad.

Meanwhile, Pakistan is facing pressure from Washington over a possible 29% import tariff. According to a Reuters report, Pakistan is pushing for a trade pact to avoid this economic blow. The U.S. recently imposed new tariffs on several nations, partly attributing the decision to Pakistan’s $3 billion trade surplus with America.

Trump stressed that any U.S. trade agreement would be anchored in peace and regional stability. “We are not in favor of escalating conflict. Trade flourishes in peace,” he stated.

U.S. Deputy Secretary of State Christopher Landau echoed these sentiments after meeting Indian Foreign Secretary Vikram Misri in Washington. He called India-U.S. relations “strategically historic,” emphasizing cooperation on fair trade, immigration control, and anti-drug trafficking efforts.

Further bolstering this trajectory, Indian Commerce Minister Piyush Goyal recently visited the U.S. to accelerate trade discussions. Sources indicate that India may soon allow American firms to participate in over $50 billion worth of public procurement projects, significantly expanding bilateral trade.

Currently, Indian exports face a 26% duty in the U.S., and a breakthrough agreement could ease this burden, boosting mutual economic ties.

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