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India-US Trade Deal: Racing against time, interim deal likely to be before July 9

India and the US are engaged in intense negotiations to finalize an interim trade deal before the July 9th deadline. Key sticking points include agricultural concessions and tariffs on various goods. Failure to reach an agreement could result in the reinstatement of reciprocal tariffs, impacting both nations significantly.

Key sectors in dispute: Agriculture, Automobiles, and more
Key sectors in dispute: Agriculture, Automobiles, and more
| Updated on: Jun 30, 2025 | 12:52 PM

New Delhi: The diplomatic and balanced negotiation for an interim trade deal is ongoing between India and the USA before 9th July 2025, said sources on Monday. The interim trade deal is being brokered amid the intense geopolitical tussle and heft. For the next round of talks, the Indian diplomatic mission may soon visit the US to broker a deal before the given deadline.

US President Donald Trump announced reciprocal tariffs on 2nd April on all the American imports. Just two days after announcing the tariffs, he announced a 90-day pause.

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Rajesh Agrawal, Special Secretary, Department of Commerce, currently serving as the primary negotiator, recently completed a four-day visit in this matter. He is currently at the helm of diplomatic affairs, dealing with his American counterpart, Commerce Secretary Howard Lutnick, to break an interim trade deal before July 9. The US team was here from June 5 to June 11 for the talks.

"We are very keen, we are engaged, and we are trying. Both sides are trying, but both sides have to be happy," sources said when asked if the two countries are keen to finalise an interim trade agreement by July 9.

India-US Trade Agreement

There exist certain areas or sectors in the trade deal that are irritants to both sides and is at bottlenecks with each other. Sectors such as agriculture and dairy are difficult and challenging for India to open to certain international players, as these areas have several political and economic connotations.

The USA wants concessions on certain industrial goods and automobiles—especially electric vehicles, wines, petrochemical products, and genetically modified (GM) crops.

India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewelry, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas in the proposed trade pact.

Failure to conclude an interim trade deal before the given timeline will invite the reciprocal tariffs that President Trump announced on 2nd April. For India, the slapped tariff would be around 26 percent on all Indian exports to America.

There is complete uncertainty over the further extension of tariff suspension beyond July 9.

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