The next round of talks with the US on reaching an interim trade agreement will be held in New Delhi with a team of American officials expected to be here in the next few weeks.
The Indian team of negotiators that was in Washington for four days of talks returned to New Delhi during the weekend. While negotiators were getting to the nitty-gritty, commerce and industry Minister Piyush Goyal met US commerce secretary Howard Lutnick twice during the course of the week to give a political direction to the negotiations.
While the talks started with the aim of concluding the first tranche of the Bilateral Trade Agreement (BTA) by the autumn of this year, the reciprocal tariffs and its 90-day suspension has steered the discussions on having an interim trade deal.
Both sides are working to arrive at an understanding on the interim deal before July 8, when the reciprocal tariffs on India get fully implemented. US President Donald Trump has imposed a 26% additional tariff on Indian imports but kept its full implementation in abeyance till July 9. Now Indian exports are subject to just 10% extra baseline tariffs.
“Talks are moving positively. Before July 8, we are looking at concluding an interim deal before the first tranche. It will include goods, non-tariff barriers, some areas of services also like digital,” an official had earlier said.
In the interim trade deal, New Delhi is pushing for full exemption from the 26% reciprocal tariff on Indian goods. As per US laws any reduction of tariffs below the Most Favoured Nation (MFN) tariffs requires approval from the US Congress. But as the reciprocal tariffs were imposed through an executive order under a law dealing with national emergencies, they can be modified by a similar order.
Through the BTA, India and the US are aiming to increase their trade to $ 500 billion by 2030 from $ 190 billion at present. To boost its exports through the trade agreement, India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, chemicals, grapes, and bananas in the proposed pact with America.
On the other hand, the US wants duty concessions in sectors like certain industrial goods, automobiles (electric vehicles in particular), wines, petrochemical products, dairy, agriculture items such as apples, and tree nuts.
The US is India’s biggest trade partner. In FY2025, trade between India and the U.S. reached $186 billion as per the commerce ministry data. India exported $86.5 billion in goods to the U.S. while importing $45.3 billion, creating a goods trade surplus of $41 billion. In services, India exported an estimated $28.7 billion and imported $25.5 billion, adding $3.2 billion to the surplus. Altogether, India ran a total trade surplus of about $44.4 billion