India may seek sunset clause in U.S. trade pact amid tariff concerns

India is weighing a demand for a sunset clause in its trade deal with the United States, a provision that would build in a mandatory review or expiry date for the agreement, Business Standard reported. The move signals that New Delhi, while eager to conclude an interim pact before the July 9 tariff deadline, is equally anxious about the long-term implications of any commitments it makes.

A sunset clause is a standard tool in modern trade agreements that forces both parties back to the table after a set number of years — typically five to ten — to either renew, revise or let a deal lapse. For India, which has historically been cautious about opening its agricultural and dairy sectors to foreign competition, such a provision would provide a crucial escape valve if domestic industries face unexpected harm.

The demand also reflects the broader political reality in India, where trade deals are deeply sensitive and subject to intense scrutiny from farmer groups, small manufacturers and opposition parties. Locking in terms indefinitely with any major trading partner, let alone the United States under the current unpredictable tariff environment, carries significant political risk.

U.S. trade negotiators have generally resisted sunset clauses in bilateral agreements, preferring durable frameworks. Whether Washington accepts this Indian ask — or whether it becomes a sticking point in the 'final touches' phase — could shape both the content and the durability of the eventual deal.