India-US trade talks spill over into next week

Indian and U.S. officials engaged in high-level trade negotiations here to arrive at an interim deal on tariff cuts, ahead of the July 9 deadline, have decided to extend their ongoing talks into next week, according to a senior official.

India’s negotiating team, headed by Additional Secretary Rajesh Agrawal, has held talks over two days with senior officials from the Office of the United States Trade Representative (USTR), who arrived in Delhi for weekend talks.

"The two countries are actively engaged in focused discussions to facilitate greater market access, reduce tariff and non-tariff barriers, and enhance supply chain resilience and integration," an official said.

The negotiators are aiming to finalise an interim trade deal ahead of the July 9 deadline that has been fixed by US President Donald Trump for the 90-day pause on new tariffs that were to be levied on Indian products. Negotiations are expected to continue after that for a broader trade deal to be signed in September-October.

The visit of the US team comes in the backdrop of Union Commerce Minister Piyush Goyal's recent trip to Washington for the trade talks.

India has proposed significant tariff reductions, potentially lowering average duties from 13 per cent to 4 per cent, in exchange for exemptions from US tariff hikes imposed during the Trump administration. These concessions are on the same lines as those offered in the recent bilateral free trade agreement that India has signed with the United Kingdom.

India is seeking market access for its industrial products such as steel, aluminium, auto components and pharmaceutical goods. Recently, the US doubled safeguard duties on steel and aluminium imports to 50 per cent, which has adversely impacted India’s exports. Although India has moved the WTO on the issue, it is hoping to settle the issue through the bilateral trade agreement.

The US is also seeking broader market access for its agricultural and dairy products, but for India, the livelihood issue of the country’s small farmers is paramount, and hence, this is considered a sensitive area.

India may allow the import of select agricultural products, such as almonds, as these are already flowing into the country. However, as a quid pro quo, India is likely to press for improved access to the US market for seafood products like shrimp and fish, as well as spices, coffee, and rubber—segments where Indian exporters are globally competitive but face tariff competition in the American market.

Trade between India and the US touched the $129 billion mark in 2024, with New Delhi recording a trade surplus of $45.7 billion. In February, Prime Minister Narendra Modi and President Trump launched 'Mission 500', an initiative aiming to double bilateral trade to $500 billion by 2030. The joint decision was announced during PM Modi’s visit to Washington.

US Secretary of Commerce Howard Lutnick also announced that a trade deal between India and the United States is likely to be finalised shortly. He stated this in his address at the US-India Strategic Partnership Forum Annual Leadership Summit in Washington.