India and the United States are close to finalising an interim trade deal, with both sides working to wrap it up within the next 48 hours, according to a report by NDTV. Negotiations are currently underway in Washington. India’s trade team has extended its stay in the US capital to resolve key issues before the July 9 deadline, when the 90-day pause on 26 per cent US tariffs is set to end.
Agriculture and dairy off the table: Report
The trade talks, which have been ongoing for the past few months, have faced hurdles over sensitive sectors. The United States has been pushing India to open its market to agriculture, dairy, and genetically modified (GM) crops, a move India has long resisted due to concerns about its farmers.
Citing sources, NDTV Profit reported on Thursday, July 3, that both sectors are likely to be excluded from the deal due to concerns over food safety and rural livelihoods. India’s farming sector is dominated by small-scale farmers, making such concessions politically difficult.
India seeks tariff cuts for key exports
India is pushing for meaningful tariff concessions on its labour-intensive exports such as footwear, garments, and leather. These sectors provide jobs to millions and are considered critical for India’s economic growth. Indian negotiators have stated that they will not sign a deal unless it ensures better market access and reciprocal tariff reductions.
However, negotiators have acknowledged that without broader tariff cuts, especially on high-employment goods, the goal of doubling bilateral trade to $500 billion by 2030 is unrealistic, reports NDTV.
Ajay Sahai, CEO of the Federation of Indian Export Organisations (FIEO), told NDTV, “Our estimate is that once the Interim India-US Trade Deal is finalised, Indian exports to the US will double within the next three years.”
Focus on reciprocal tariff reductions
According to NDTV reports, the core of the deal now centres on mutual tariff reductions. Officials from both countries are working on lowering overall duty barriers to create a more balanced trade environment.
Trump signals support for a deal
On Tuesday, US President Donald Trump said a deal with India was close and promised reduced tariffs.
“I think we are going to have a deal with India. And that is going to be a different kind of a deal. It is going to be a deal where we are able to go in and compete. Right now, India does not accept anybody in. I think India is going to do that, and if they do that, we are going to have a deal for much less tariffs,” Trump said.
Countdown to July 9 deadline
India and the US have been discussing a Bilateral Trade Agreement (BTA) to prevent the return of a suspended 26 per cent reciprocal tariff. This tariff, first imposed by the Trump administration on April 2, was paused for 90 days, opening the door for negotiations. If no deal is signed by July 9, the tariff will automatically return.
“The failure of these trade discussions would trigger the immediate reimplementation of the 26 per cent tariff structure,” a senior official told news agency ANI.
Despite the deadline pressure, according to media sources, a few officials and experts believe India may not be heavily impacted even if the talks fail.