Indian officials will head back to Washington soon to resume the trade discussions, said sources. According to a government official, New Delhi is currently in the process of packaging an interim deal.

“Our discussions will continue to focus on the interim deal and the bilateral trade agreement,” said the government official.

The Indian trade delegation, led by chief negotiator Rajesh Agrawal, had returned to New Delhi earlier this month after completing a round of discussions in Washington on an interim trade agreement. Despite progress, further negotiations are needed due to unresolved issues in the agriculture and automotive sectors.

The discussions, held from June 26 to July 2, coincided with the July 9 expiry of the suspension of reciprocal tariffs imposed by the US. However, US President Donald Trump extended the deadline from July 9 to August 1.

India seeks exemption of its goods from additional tariffs while maintaining its position on sensitive sectors like dairy, complicating the negotiations. India is also pushing for duty concessions on labour-intensive sectors such as textiles, gems, jewellery, leather goods, garments, plastics, and chemicals. This agreement is a key step towards a broader bilateral trade agreement expected by September-October this year. The broader deal aims to more than double bilateral trade to $500 billion by 2030, from the current $191 billion.

The US seeks duty reductions on industrial goods, automobiles, especially electric vehicles, and various agricultural products. However, the Indian government remains resistant to opening its dairy market, a politically sensitive sector.