India, US set to seal interim trade deal before July 8 amid tariff deadline pressure

The imminent India-US interim trade deal is poised for announcement before July 8, as both nations have reportedly agreed on all terms. This follows negotiations led by Rajesh Agrawal, India’s chief negotiator and Special Secretary in the Department of Commerce, who has been leading discussions in Washington. This agreement is crucial as it coincides with the deadline set by former US President Trump for imposing reciprocal tariffs, which could trigger significant economic implications if not resolved timely.

The trade negotiations come against the backdrop of a looming tariff deadline on July 9, following Trump’s “whatever we want” stance towards tariff extensions, as he mentioned in a conversation with Fox News. The US had initially suspended a 26 per cent levy on Indian imports as of April 2, aimed at bridging the trade deficit, while maintaining a baseline 10 per cent tariff. India has been actively seeking full exemption from these additional tariffs, a critical aspect of the ongoing trade dialogue.

The anticipated trade agreement is expected to focus on multiple sectors, including agriculture, automobiles, industrial goods, and labour-intensive products. Notably, agriculture and dairy remain contentious areas where India is challenged to provide duty concessions to the US. In contrast, the US has its sights set on concessions for specific industrial goods, automobiles—particularly electric vehicles—and agricultural products like apples and genetically modified crops. These sectors are seen as pivotal for both economies, aiming to enhance mutual trade benefits.

India seeks reciprocal benefits in the trade pact, particularly in labour-intensive sectors such as textiles, gems, jewellery, leather goods, and certain agricultural products. The strategic aim is to secure duty concessions that could benefit Indian exports in these segments, enhancing economic ties with the US. According to sources, both sides are working towards a comprehensive first tranche of a Bilateral Trade Agreement (BTA) by October 2025, which is expected to further cement the economic partnership.

The trade discussions have been underscored by Trump’s recent remarks about removing all trade barriers, which he described as “unthinkable”. This reflects a broader intention to solidify economic cooperation between the two countries, potentially easing market access and enhancing bilateral trade engagements. The successful conclusion of this deal could mark a significant milestone in India-US relations, fostering a more robust economic partnership and opening new avenues for collaboration in the future.

(With PTI and agency inputs)