The India-US interim trade deal is now on the cusp of formal announcement, with July 8 identified as the likely date, according to sources familiar with the negotiations. Both nations have finalised all terms, following an intense round of talks led by Rajesh Agrawal, Special Secretary in the Department of Commerce, who has been stationed in Washington D.C. to wrap up the discussions.
Strategic Timing
The deal’s timing is critical — just ahead of Donald Trump’s July 9 deadline to reimpose reciprocal tariffs. Since April 2, the US had suspended additional 26% tariffs on Indian imports in an attempt to bridge the bilateral trade gap, though a baseline 10% tariff has remained. India has been pushing for a complete exemption from these additional duties.
Trump, known for his aggressive trade policy, recently reinforced that he won’t likely extend the deadline, stating on Fox News that the US would do “whatever we want” on tariffs. This has increased pressure on negotiators to conclude the interim deal swiftly.
Broader Trade Pact in the Works
While the current agreement is interim in nature, both sides are targeting a multi-sectoral Bilateral Trade Agreement (BTA) by October. This broader framework is expected to cover:
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Agriculture
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Automobiles and electric vehicles
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Industrial goods
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Labour-intensive products
Negotiation Sticking Points
Some sectors have proved especially contentious:
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Dairy and Agriculture: India has traditionally been reluctant to offer duty concessions in these areas, especially on dairy, which remains closed in all Indian FTAs to date. The US, however, is pushing for access to dairy, apples, tree nuts, and GM crops.
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Automobiles and Industrial Goods: Washington wants concessions on EVs, wines, petrochemicals, and industrial machinery.
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Labour-Intensive Exports: India, for its part, is seeking tariff relief for textiles, gems and jewellery, leather, garments, plastics, chemicals, and agri-products like shrimp, grapes, bananas, and oil seeds.
Recent Momentum
Trump has repeatedly indicated that a major India deal is imminent. Last week, he described existing trade barriers as “unthinkable” and suggested his administration aims to eliminate all trade obstructions.
If finalised by July 8, this deal will likely provide a temporary reprieve from looming tariffs, while setting the tone for deeper economic cooperation ahead of the October BTA.
This also marks a significant step toward normalising strained trade ties between the two democracies after years of tit-for-tat tariff actions and disputes at the WTO.
