New Delhi: India and the United States are in the final stages of negotiating an interim trade agreement, with high-level discussions underway in New Delhi this week to secure tariff cuts in key sectors like agriculture and automobiles. The push comes as both sides aim to conclude the deal before former US President Donald Trump’s self-imposed July 9 deadline.
A US delegation led by senior officials from the Office of the United States Trade Representative (USTR) began two days of closed-door talks on Thursday with Indian trade negotiators, headed by Rajesh Agrawal, sources familiar with the discussions told reporters.
“Negotiators are working on specific tariff reductions in agriculture and auto sectors, along with potential incentives for Indian firms,” one Indian official said on condition of anonymity due to the sensitive nature of the talks.
The interim deal, which may be formally announced by the end of June, is expected to be finalized following this round of meetings. While no immediate public statement is anticipated, an announcement could follow shortly after the discussions conclude, possibly by Sunday, a second official added. Trade Minister Piyush Goyal, currently attending engagements in Italy, may return to meet the US delegation if required.
US Commerce Secretary Howard Lutnick confirmed earlier this week in Washington that the talks were progressing and that a deal was likely soon.
The two countries had agreed in February to work on a phased trade pact, targeting an ambitious bilateral trade volume of $500 billion by 2030. In 2024, India-US trade stood at $129 billion, with India recording a $45.7 billion surplus.
India, fresh from its recent trade pact with the UK and ongoing negotiations with the European Union, is seeking to strike a balance between opening its markets and protecting domestic interests. Officials say New Delhi is resisting Washington’s pressure to liberalize its farm and dairy sectors, citing the risk of rural political backlash.
One government source noted, “We’re willing to offer a better deal than the UK pact—cutting average tariffs down to 10% to match US rates and even offering near-zero duties under quota systems in exchange for improved market access and stronger supply chain linkages.”
However, Washington continues to raise concerns over India’s average agricultural tariff of 39%, with some duties as high as 45–50%. The US is also seeking to expand access for American corn exports, particularly for use in ethanol production.
Despite the sticking points, officials on both sides remain optimistic about closing the deal within the next few weeks, which would mark a significant step forward in deepening economic ties between the world’s two largest democracies.
