Uncertainty persists over whether India and the US will be able to clinch a trade deal ahead of the August 1 deadline when the US is set to levy reciprocal tariffs on imports from other nations. However, India remains optimistic that negotiations will culminate in the signing of the first tranche of a bilateral trade agreement by the specified timeline of fall 2025.

“The Indian team of negotiators returned to India over the weekend. India continues to stick to its stance that sensitive sectors of agriculture, dairy and GM crops are a no-go area as part of the trade talks,” sources indicated, adding that further talks may be required to finalise the trade deal. 

“One has to see what has to be done next. Discussions in India are also underway on how to proceed,” the source said. 

The fifth round of negotiations between India and the US on the interim trade deal were held for four days from July 14-17 in Washington DC. The Indian team was led by Rajesh Agrawal, Special Secretary, Department of Commerce.

The US plans to impose a reciprocal tariff of 26% on India from August 1, including a 10% baseline tariff on all countries that is already in effect.

Traders and industry are worried about the impact of the tariffs on exports, which will become more expensive to the US, which is a key export market for India. However, farmers’ associations have urged the government not to water down its stance on agriculture, dairy and GM crops.

However, officials remain confident that the first tranche of the BTA will be completed by September-October this year, as was outlined in the Leaders’ statement in February after a meeting between Prime Minister Narendra Modi and US President Donald Trump.

The US remains India’s top export destination with goods exports in April and May 2025 rising to $25.52 billion from $20.89 billion in the same period last fiscal.