India and the United States are racing against time. With just a few days until the deadline of July 9, officials from both countries are scrambling to finalize a Bilateral Trade Agreement. If the agreement is reached, both sides may avoid a significant tariff increase. US President Donald Trump reaffirmed on Tuesday (local time) that India and the US will soon reach a trade agreement with "much lower tariffs," allowing both countries to compete.
President Donald Trump remains confident. Speaking to reporters, he said, "I believe we will reach an agreement 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 this, and if they do, we will reach an agreement with significantly lower tariffs."
Key Highlights
- Trump issues stern tariff warning, positioning India to negotiate terms before his July 9 deadline looms.
- US Treasury Secretary Bessent signals India‑US deal is close, aiming to avoid Trump's imminent tariff hike.
With the phrase "if they do that...", Trump once again put the tariff ball in India's court.
India and the United States have been negotiating a Bilateral Trade Agreement (BTA) ahead of the critical July 9 deadline for the 90-day pause on tariff escalation.
Meanwhile, India has taken a firmer stance on agricultural issues as high-stakes trade talks with the United States approach a critical juncture, government sources said on Monday.
Farm Front Lines
But backroom discussions in Washington are tense. India's delegation, led by Chief Negotiator Rajesh Agrawal, has extended its stay in an effort to close the gaps. Agriculture is the toughest nut to crack.
One senior government official stated unequivocally, "There is no question of conceding on dairy." "That is a red line." More than 80 million people in India rely on the dairy industry. For Delhi, opening it up is politically impossible.
External Affairs Minister S Jaishankar emphasized the stakes. "We are in the middle, or hopefully more than the middle, of a complex trade negotiation. Obviously, I hope we can bring it to a successful conclusion," he added. However, he warned, "There will have to be give and take."
Also Read: India-US Trade Deal Expected to Be Announced Before July 9
Battles for Beans and Barriers
Washington wants more. It is pressuring India to lower tariffs on apples, nuts, and genetically modified crops. The larger goal is to use India's massive farm market to close a $45 billion trade gap.
According to Richard Rossow of the Center for Strategic and International Studies in Washington, "There are two significant challenges to reaching an initial agreement." The first item on the list is the United States' access to the Indian market for basic agricultural products. India will need to protect its basic agriculture sector for economic and political reasons."
What about the second headache? Nontariff barriers. India's Quality Control Orders, which include over 700 rules governing imports, prohibit low-quality goods and encourage domestic manufacturing.Suman Berry of Niti Aayog called them a "malign intervention" that raises costs for small businesses.
Mini-deal or Bust?
Experts predict a slimmed-down pact. India could reduce tariffs on automobiles, industrial goods, and certain agricultural products such as almonds or ethanol. The US may press Delhi to purchase oil, aircraft, or relax regulations for large retailers such as Amazon and Walmart.
Rossow recalled that the original vision was clearer: "The two leaders [Trump and Modi] laid out a simple concept in their first summit this year. The United States would focus on capital-intensive manufactured goods, whereas India would concentrate on labor-intensive items."
Behind the immediate rush is a larger goal. Both sides aim to increase trade from $191 billion today to $500 billion by 2030. The first phase is scheduled to be completed in the autumn of next year.
But that dream depends on this week. If negotiations fail, tariffs will be imposed. If they succeed, companies on both sides benefit. For now, all eyes are on Washington. Time is of the essence, the stakes are high, and India's farmlands have never been more important in a global trade agreement.
