An interim trade agreement between India and the United States is expected to be finalized within the next 48 hours, with talks underway in Washington. India's trade team stayed in Washington last week to iron out key differences as the two sides work to reach an agreement before the July 9 deadline, when the pause on US tariffs is set to be lifted.
Key Highlights
- Negotiators race to finalize interim deal within 48 hours to avert U.S. tariff hike on India.
- India rejects U.S. demands on GM crops and dairy; open to concessions on walnuts and autos.
Both sides have dug in on a number of issues, including Washington's demand that India open its market to genetically modified crops, which has long been a source of contention for New Delhi due to farmer safety concerns.
The United States is also pushing for increased market access to India's agricultural and dairy sectors. However, sources told NDTV Profit that the proposed deal will most likely exclude both of these sectors due to concerns about rural livelihoods and food safety.
India, on the other hand, is reportedly pushing for significant tariff reductions on labor-intensive exports such as footwear, garments, and leather, which are major job creators.
New Delhi refuses to sign a deal that does not address both sectoral access and reciprocal tariffs on its exports, with negotiators arguing that without broader tariff cuts, particularly on high-employment goods, the goal of doubling bilateral trade to $500 billion by 2030 is unrealistic.
Also Read: White House: India-US Trade Deal Announcement Soon, Strategic Ally
"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," FIEO CEO Ajay Sahai said.
According to the NDTV profit report, the focus of the agreement has shifted to reciprocal tariff reductions or removals, with officials urging both countries to prioritise lowering overall duty barriers.
On Tuesday, US President Donald Trump reaffirmed that India and the US will soon reach a trade deal with "much lower tariffs," allowing both countries to compete.
"I believe we will reach a deal with India. And that will be a different kind of deal. It will be a deal where we can compete. Currently, India does not accept anyone. "I believe India will do that, and if they do, we will have a deal with much lower tariffs," Trump said.
