India and the U.S. hold talks ahead of interim tariff deal deadline

India and the United States began a closed-door meeting headed by Rajesh Agrawal, the Indian Chief Negotiator, to discuss tariff cuts in sectors such as agriculture and automobiles as part of an interim deal. Senior officials led the U.S. delegation from the United States Trade Representative (USTR) Office.

President Donald Trump self-imposed a July 9 deadline to end negotiations, after which his Liberation Day tariffs are expected to be reinstated.

U.S. Commerce Secretary Howard Lutnick said an official statement of agreement between the two countries is expected to be formalized before the deadline. While addressing the US-India Strategic Partnership on Monday, Lutnick noted that the relationship between Trump and Narendra Modi , the Indian Prime Minister, is firm and very positive, making trade negotiations easy.

India aims to finalize talks before Trump’s self-imposed deadline 

According to an official from the Indian delegation, in the current round of talks, negotiators are discussing tariff cuts on specific sectors, such as agriculture and autos, and proposing benefits for Indian companies.

The official added that Trade Minister Piyush Goyal, currently in Italy, would return to meet the delegation and help accelerate the closure of the discussions. The official spoke on the anonymity condition of the meeting, attributing it to the sensitive nature of the talks.

U.S. Commerce Secretary Howard Lutnick said countries negotiating early will get a better deal. He believes India is trying to be among the first countries to reach agreements and appreciates the country for the effort. He added that those kinds of deals used to take two or three years, but now they happen in just a month, stating that it is not an ordinary relationship between the countries.

Lutnick revealed that Trump thinks of America first but does not think of America only. He hopes to achieve market access and for American businesses to reasonably access the Indian markets. Lutnick believes having the right person from both sides for negotiations will accelerate the discussion towards an agreement.

India aims for a 26% tariff reduction to near zero

India seeks a complete exemption from the 26% tariff imposed on its domestic products and a duty reduction on the specific sectors that create employment opportunities.  These sectors included textiles, gems, jewelry, leather products, garments, plastics, chemicals, shrimp, and oil seeds.

The U.S., in return, requested a reduction of tariffs on Industrial products, automobiles (particularly electric vehicles), wines, petroleum products, and agricultural goods. 

One of the officials in today’s meeting revealed that India will not follow the UK’s lead, which resisted U.S. demands to open their farm and dairy markets, citing potential rural backlash. The UK Domestic Farmers’ Union specifically raised concerns about an imbalanced burden of concessions to secure benefits for the British automotive and steel sectors.

The official said India is ready to offer a better deal than the UK, with average tariffs down to 10% to match the U.S. base rate and near-zero duties in exchange for market access and supply chain links.

The U.S. flagged India’s average farm tariff of 39%, with some duties reaching nearly 50%. The country is pushing India to allow corn imports for ethanol production. India has remained willing to import non-GM products, including Alpha hay feeds for cattle.

India and the U.S. agreed early this year to work on a gradual deal that would lift bilateral trade to $500 billion by 2030. The trading partnership between the two countries has been maintained for the fourth year straight, with transactions reaching $131.84 billion.  The U.S. accounts for approximately 18% of India’s exports, 6.22% of its imports, and 10.73% of its total merchandise trade. Bilateral trade in 2024 rose to $129 billion, with India getting a $45.7 billion surplus.

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