While the August 1 deadline for the implementation of Trump’s tariffs looms, India is yet to finalise the trade deal with the US. In fact, now it is certain that the trade deal with Washington won’t be inked before the deadline, as a team from the US is scheduled to visit India on August 25 to hold further negotiations. This would be the sixth round of talks between the two sides.
India’s chief negotiator Rajesh Agrawal and Brendan Lynch, the Assistant US Trade Representative for South and Central Asia met in Washington for the fifth round of talks, after which Agrawal returned to New Delhi.
Meanwhile, Trump has indicated that if the two nations fail to reach an agreement, 25 per cent tariffs would be imposed on India. When asked if India would face new levies, Trump said, “They are going to pay 25%. Yeah, I think so. India has been – they’re my friends.”
Now, the final deal, the comprehensive bilateral agreement, is expected to be finalised by September or October, with an interim mini deal expected in the meantime.
‘MORE NEGOTIATIONS’
US Trade Representative Jamieson Greer told CNBC in an interview that India needs more negotiations. He added that Trump is more interested in good deals than quick deals. India has shown “strong interest in opening portions of its market” though its trade policy had long focussed on protecting domestic interests, Greer said.
“We need more negotiations with our Indian friends to see how ambitious they want to be,” Greer said.
Trade minister Piyush Goyal said talks with the US on the trade deal are at a ‘very advanced’ stage.
A government official said that Trump could issue a tariff letter imposing duties of 20-25 per cent in a “worst case scenario”. “However, we assume it would be a temporary measure, considering the five rounds of trade talks that have taken place. A deal will soon be worked out,” the official said.
India is holding back on fresh offers while adjusting its strategy amid broader US tariff threats targeting BRICS nations, including India, over issues such as de-dollarisation and purchases of Russian oil, according to another official.
WHAT’S THE HOLD-UP
India has taken a firm stance against granting duty concessions on agricultural and dairy products, which the US has been seeking. Agriculture and dairy remain off-limits for New Delhi, which is unwilling to permit imports of genetically modified soybean or corn or to open its dairy sector. India is also prioritising the removal of an additional 26 per cent tariff and the easing of tariffs on steel, aluminium, and the automobile sector.
The US, on the other hand, is seeking duty concessions on various industrial goods, focusing on electric vehicles, wines, and petrochemical products. The talks also cover agricultural goods, dairy items, and genetically modified crops.
Both countries aim to conclude the trade agreement soon but an interim trade pact seems increasingly likely.
India’s merchandise exports to the US rose by 22.8 per cent to USD 25.51 billion in the April-June quarter, reflecting a strong trade relationship. Total bilateral goods trade reached about 129 billion dollars in 2024, with India posting a trade surplus of nearly 46 billion dollars.
