With trade negotiations between India and the United States entering their most critical phase, US President Donald Trump on Tuesday signalled confidence in striking a new deal that would significantly lower tariffs, provided India agrees to open its markets to greater foreign access.
“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,” said President Trump while addressing reporters.
The two countries have been working to secure an interim Bilateral Trade Agreement (BTA) before the critical 9 July deadline, which marks the end of a 90-day moratorium on tariff escalation. Trade officials on both sides have extended their meetings in Washington in a bid to avert the automatic reimposition of the 26 per cent reciprocal tariffs originally introduced during Trump’s earlier term on 2 April.
Indian negotiators, led by Chief Trade Negotiator Rajesh Agrawal, have extended their stay in the US capital to continue consultations. Two rounds of discussions held last week were reportedly inconclusive, prompting further sessions as both countries aim to finalise terms.
“The failure of these trade discussions would trigger the immediate reimplementation of the 26% tariff structure,” a senior official warned, indicating the high stakes attached to the outcome.
India has taken a firm stand on protecting its agricultural sector, which is dominated by small-scale farmers operating on narrow landholdings. Government sources say this political and economic sensitivity makes agricultural concessions particularly challenging.
Also read: US-India trade deal announcement soon: White House
India has, so far, refused to open its dairy sector to foreign players under any previous free trade pact, and that stance appears unlikely to change despite mounting US pressure.
The United States is pressing for lower tariffs on a range of agricultural commodities, including apples, tree nuts, and genetically modified crops. India, in contrast, is seeking preferential access for its labour-intensive exports such as textiles, garments, leather goods, gems and jewellery, and certain agricultural produce like shrimp, grapes, bananas, and oilseeds.
While discussions are focused on clinching an interim arrangement, both sides are also preparing the ground for a comprehensive BTA, with the first phase of the broader framework expected to be completed by autumn 2024.
The overarching ambition is to raise bilateral trade from the current $191 billion to $500 billion by 2030.
President Trump’s remarks, made less than a week before the tariff deadline, reflect the urgency in Washington to secure favourable terms before the existing temporary arrangements lapse. The proposed deal could shape the commercial contours of one of the world’s most consequential bilateral relationships over the next decade.
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