'Drop-Dead Date Is End Of July' For India-US Trade Deal, Warns USISPF Trade Advisor Mark Linscott
In an exclusive interview with Republic, USISPF’s Mark Linscott warned that the "drop-dead date" for the India-US interim trade pact is the end of July. Failure to seal the deal could expose New Delhi to Section 301 tariffs that are significantly higher than those of its Asian market competitors.
- Republic Business
- 6 min read
“Drop-dead date is end of July”: Mark Linscott Warns India Faces Higher Tariffs if US Trade Deal Fails
Mark Linscott, Senior Advisor with the US India Strategic Partnership Forum (USISPF), has warned that India could face tariffs higher than those of its Asian competitors if New Delhi and Washington fail to conclude the proposed interim trade agreement before the end of July, calling it the “drop-dead date” for negotiations.
In an exclusive interview with Republic Media Network, Linscott said that while both countries are keen to finalise the deal, several contentious issues remain unresolved and negotiations are expected to stretch well into June, with significant political intervention likely required from both sides. “The drop-dead date clearly is by the end of July,” Linscott said. “The risk for India is that it’s a higher tariff than 18 percent and potentially a higher tariff than competitor nations.”
His remarks come shortly after Commerce Secretary Rajesh Agarwal indicated that the next major face-to-face round of negotiations between India and the United States is expected in June.
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According to Linscott, however, expectations of a quick breakthrough may be premature. “I’d be shocked if it’s done by early June,” he said, adding that “there’s still some gaps to bridge.”
He stressed that both countries would need to soften their positions if they want the agreement to materialise. “There will probably have to be some give and take on both sides to reach those compromises,” he said. “Perhaps the Indian side, Rajesh and his team, being able to give a little more, and the USTR team finding ways to be flexible too on some of the specific terms.”
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Linscott suggested that negotiations may intensify only after Washington begins taking concrete Section 301 tariff actions. “It probably will require, just in terms of focusing minds, that there are some Section 301 announcements that start to happen. And then the serious negotiation probably takes place.”
He also indicated that the deadlock may eventually require direct ministerial intervention. “I wouldn’t be surprised if the ministers themselves, Jamieson Greer and Piyush Goyal, have to get directly involved to resolve some issues.”
‘Section 301 is a tool to accomplish the deal’
A significant part of the negotiations now centers on potential Section 301 tariff actions by the US, including investigations into sectors such as solar modules, steel, and excess industrial capacity, all of which are sensitive to India’s manufacturing ambitions.
But Linscott argued that Washington’s objective is not merely punitive. “I think USTR and the administration’s top priority is to finalize this interim agreement and move on to the next phases of the bilateral trade agreement,” he said. “I think they see Section 301 as a tool to accomplish that.”
According to him, the broader objective is to secure market access commitments and pave the way for a much larger bilateral trade framework.
“I don’t think it’s just tariffs for the sake of tariffs,” he said. “There’s agreement on both sides that there are strong commitments to open markets between them and set the stage to do more down the road.”
Linscott said the ultimate aim is to transition from the interim agreement toward a broader bilateral trade agreement that could resemble a full-fledged free trade arrangement.
“Ultimately, I think they want to conclude this interim agreement and then move on to the next phases of the BTA negotiations,” he said.
He added that the long-term scenario could potentially lead to significantly lower tariff barriers. “Ideally, it’s a scenario in which all of these actions lead to an 18 percent tariff, maybe even lower down the road, and implementation of the other commitments made in the interim agreement.”
Can countries trust these agreements?
Linscott acknowledged the uncertainty many countries now feel regarding the durability of US trade commitments amid rapidly changing tariff announcements from Washington. Asked whether countries can truly trust agreements negotiated with the United States given recent policy shifts, Linscott admitted the concerns were legitimate.
“It legitimately raises questions for a lot of countries about, can they trust these agreements?” he said while pointing specifically to the confusion caused by the administration’s earlier reliance on IEEPA tariffs before pivoting toward Section 301 mechanisms.
“There have been a lot of developments with the initial IEEPA tariffs and those being struck down, and then the president announces something, and there’s follow-up action,” he said. “So it legitimately raises questions for a lot of countries about whether these agreements have real integrity in terms of being implemented and being in place for the long term.”
Linscott suggested the earlier tariff approach had complicated matters unnecessarily, "I think that’s backfired, to be honest,” he said, referring to the administration’s IEEPA-led tariff strategy.
According to him, the uncertainty surrounding tariffs, coupled with geopolitical developments such as the Iran conflict and debates around Russian oil tariffs, has made negotiations considerably more difficult. “Everything that’s happened with the IEEPA tariffs and the war in Iran and the Russian oil tariffs has complicated things a lot,” he said. “It made the job of negotiating this agreement much harder than would otherwise have been the case.”
Despite that, Linscott maintained that both countries still fundamentally want the agreement.
“I think if the US and India can conclude this interim agreement, it will be a strong one. It will be mutually beneficial.”
Why India wants the deal?
Linscott said the proposed agreement is not just strategically important, but economically crucial for India, especially in comparison with manufacturing competitors like Vietnam, Thailand, and Bangladesh.
According to him, India’s primary concern is relative tariff positioning. “The real question for India is comparative advantage,” he said. “What does India’s tariff look like compared to Thailand’s tariff, Bangladesh’s tariff, Vietnam’s tariff?”
He also warned India’s earlier exposure to reciprocal tariffs and potential Russian oil-linked tariffs represented a dangerous scenario for exporters, “When the 25 percent reciprocal tariff and the Russian oil tariff were in place, that was the worst possible scenario for India."
Linscott argued that securing lower tariff treatment than competing Asian economies would represent a major win for New Delhi. “If India can secure a bilateral trade agreement that gives it a lower tariff than all those other countries, I think that’s a pretty strong win for India.”
Linscott also framed the deal as strategically symbolic for both governments amid efforts to diversify global supply chains away from China, “Strategically, it has symbolic value for both countries. It’s a reflection of the importance of the relationship between the two countries.”
He added that the successful implementation of the agreement could help strengthen supply chain resilience between India and the United States, “It could lead to more resilient supply chains between the United States and India and less dependence on China, ideally.”
However, Linscott reiterated that failure to conclude the deal before July 24, when Section 122 tariffs expire, could leave India exposed to a far harsher tariff regime under Section 301.
“Section 122 will be over by July 24th. It will be Section 301,” he said. “And the risk for India is that it’s a higher tariff than competitor nations.”