Eurasia Group sees 60% chance of India-US trade deal by year-end

India and the United States are showing renewed progress in their ongoing trade negotiations, with Eurasia Group raising the likelihood of a deal being finalised by the end of the year from 40% to 60%, according to Pramit Pal Chaudhari, Head of Eurasia Practice in India.

A key development has been the improved rapport between Prime Minister Narendra Modi and US President Donald Trump. The two leaders, who had not spoken since June, are now communicating positively, including through tweets, and a face-to-face meeting is being considered at the East Asia Summit in Kuala Lumpur in October. Chaudhari said, “This changes the entire character of the negotiations, as previous obstacles were largely White House-driven.”

On the trade front, gaps in farm and agricultural issues are narrowing, with both sides showing greater willingness to compromise. While India has maintained protection of its core agricultural and dairy sectors, Chaudhari noted, “The head of Amul, our biggest dairy cooperative, has publicly said, ‘Bring on the Americans. We can take them on,’ because by the time the milk lands in India, there is no way they can compete.”

Energy and defence remain closely linked in the talks. According to Chaudhari, India is expected to reduce its purchases of Russian oil while potentially increasing its imports of American crude. However, strategic acquisitions, such as the S-400 and S-500 air defense systems, require additional waivers under US CAATSA sanctions. Chaudhari emphasised that successfully merging these energy and defence elements could create a “win-win” outcome for all parties.

While challenges remain, particularly around Russian oil, the combination of leader-level engagement, agricultural compromise, and defence-energy linkages suggests that a near-term India-US trade deal is more plausible than ever.

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