Resolution criteria

The market resolves YES if India and the US finalize and formally announce a tariff reduction agreement by August 1st, 2026. The agreement must be officially announced by both governments or their authorized trade representatives. An interim tariff reduction agreement would qualify, as analysts expect a more comprehensive bilateral trade agreement to be finalized in 2026. The market resolves NO if no such agreement is finalized and announced by the deadline.

Background

President Donald Trump imposed 50% tariffs on Indian goods in August 2025 to penalize India for its trade barriers and purchases of Russian oil. India and the US are at an advanced stage of negotiations for a bilateral trade agreement, with talks aimed at finalizing the first tranche of the proposed Bilateral Trade Agreement (BTA). If the agreement materializes, US tariffs on Indian goods could be brought down to 15–20 per cent, significantly improving India's competitiveness.

Considerations

Experts note that concluding a deal with Washington will prove difficult because the US wants to open India's agriculture market, which India cannot do, and wants India to reduce trade with Russia, which is also difficult for India. At the beginning of 2025, analysts expected India to be the first country to get a trade deal, but by year-end it was the last country which had not got a trade deal. The proposed trade agreement, originally expected to be finalized by September–November 2025, remains in limbo, and Trump's latest threats have placed even the prospect of renewed talks in serious doubt.