New Delhi– India is on track to finalize an interim trade agreement with the United States as early as this week, aiming to avoid proposed tariff hikes on its exports announced by former President Donald Trump, according to a Financial Times report.
Led by Special Secretary Rajesh Agarwal, India’s negotiating team is currently engaged in high-level talks in Washington to conclude the bilateral trade deal.
External Affairs Minister S. Jaishankar is also expected to meet with U.S. Secretary of State Marco Rubio on Tuesday or Wednesday, on the sidelines of an official gathering in Washington, the report stated.
The interim agreement is seen as a stepping stone toward a broader and more comprehensive Free Trade Agreement (FTA) between the two countries.
Both sides are working to finalize the deal ahead of a July 9 deadline, marking the end of a 90-day pause on new U.S. tariffs targeting Indian goods. Negotiations are expected to continue beyond that date, with a full-scale FTA possibly being signed between September and October.
A key sticking point remains agricultural and dairy market access. While the U.S. is pushing for broader access, India considers these sectors highly sensitive due to the livelihoods of millions of small farmers. However, India may agree to limited imports of select agricultural products such as almonds — which are already entering the Indian market — in exchange for concessions on American tariffs.
As part of the deal, India is expected to seek greater access for its seafood exports, including shrimp and fish, as well as globally competitive products such as spices, coffee, and rubber, which currently face tariff-related challenges in the U.S. market.
To address trade imbalance concerns, India has already increased imports of American oil and natural gas. It has also offered to further expand energy purchases to help narrow its trade surplus with the U.S.
In addition, India has proposed significant tariff reductions — potentially lowering average import duties from 13% to 4% — in exchange for exemptions from the punitive tariffs imposed by the Trump administration. These proposed terms mirror concessions made in India’s recent free trade agreement with the United Kingdom.
India is also seeking expanded U.S. market access for industrial goods, including steel, aluminum, auto components, and pharmaceuticals. U.S. safeguard duties on steel and aluminum — which were recently doubled to 50% — have severely affected Indian exports. Although India has challenged the move at the World Trade Organization, it hopes to resolve the matter through bilateral negotiations.
In 2024, trade between India and the U.S. reached $129 billion, with India enjoying a $45.7 billion surplus.
In February, Prime Minister Narendra Modi and President Trump jointly launched “Mission 500,” a bilateral initiative aiming to double trade to $500 billion by 2030. The announcement came during PM Modi’s visit to Washington. (Source: IANS)
