US, India Eye Interim Trade Deal As Tariff Deadline Looms

India-West News Desk

NEW DELHI – Negotiators from India and the United States made headway in their latest round of bilateral trade discussions in New Delhi on June 10. The talks concentrated on thorny issues like market access for industrial and some agricultural goods, potential tariff reductions, and non-tariff barriers, Indian government sources told Reuters.

“The negotiations held with the U.S. side were productive and helped in making progress towards crafting a mutually beneficial and balanced agreement including through achievement of early wins,” one source stated. Reuters reported that the U.S. delegation, led by senior officials from the Office of the U.S. Trade Representative, engaged in closed-door discussions with Indian trade ministry officials, led by chief negotiator Rajesh Agrawal. Both sides also explored ways to boost bilateral digital trade by improving customs and trade facilitation measures, with sources indicating that “negotiations will continue” for an early conclusion of the initial phase of the trade pact.

An interim agreement between the two nations is anticipated by the end of the month. This deadline is significant as it precedes the expiry of President Donald Trump’s 90-day pause on reciprocal tariffs on major trading partners, which includes a looming 26% tariff on India. This potential tariff would severely impact Indian goods like rice, shrimp, textiles, and footwear, which collectively represent nearly one-fifth of India’s merchandise exports, potentially dampening foreign investment inflows.

Reuters said that India resisted U.S. demands to open its markets to wheat, dairy, and corn imports. However, it offered lower tariffs on high-value U.S. products such as almonds, pistachios, and walnuts. India also sought the revocation of a 10% U.S. baseline tariff on its exports, a request the U.S. opposed, citing similar treatment even for Britain under its recent bilateral trade agreement. Reuters reported additionally that India sought an exemption for its steel exports from a 50% tariff.

Despite these sticking points, India has committed to increasing purchases of American goods, including energy products like liquefied natural gas, crude oil, coal, and defense equipment. According to U.S. government data, India’s exports to the U.S. grew by 28% to $37.7 billion in the first four months of 2025, while imports rose to $14.4 billion, widening India’s trade surplus.