Government sources have told CNBC TV18 that an interim trade deal could be signed between India and the US within the next two days as the negotiations are in their final stages. While Indian officials are demanding greater access for labour-intensive industries, the US is seeking the removal of all tariff barriers in the dairy and agriculture sectors.However, government sources have indicated that India will not compromise on the interests of its farmers and can’t open these sectors completely. However, limited access in some areas may be allowed, such as pecan nuts, walnuts, almonds, or Washington Apples from the United States.
As intense negotiations for an interim trade deal continue, sources had told CNBC TV18 earlier this week that the trade talks were at a “sensitive stage”, and “26% tariffs” are “imminent if talks fail”. The trade delegation led by India’s Chief Negotiator Rajesh Agrawal is in the US to expedite the talks.
Last week, US President Donald Trump had said that a “very big” deal will likely with India soon. He had also indicated that he may unilaterally write letters to countries specifying tariffs to substitute formal trade agreements. India’s Finance Minister Nirmala Sitharaman has already termed dairy and agriculture as “big red lines” in India-US trade talks.Last week, a government official had said that India is resisting the American insistence on lower duty for its agricultural and dairy produce and its demand for broader access for GM crops into the Indian market. While India and the US remain keen on signing an interim deal before July 9 to avert the applicability of reciprocal tariffs, the official said that tariffs may revert to the April 2 levels if a deal is not reached by the end of the pause on tariffs. The official explained that the 26% reciprocal tariffs or the pre-April 2 position of 2.3% tariffs will still imply a relative advantage for India compared to other manufacturing economies.
On negotiations held between June 4 and 10 in New Delhi, government sources had told CNBC TV18 that in-depth talks were held on various areas like market access, Sanitary and Phytosanitary Measures (SPS), Technical barriers to trade (TBT), digital trade, customs and trade facilitation, and legal framework.Sources indicated that negotiations held with the American side were productive and helped in making progress towards crafting a mutually beneficial and balanced agreement, including through the achievement of early wins. Both sides had agreed to continue negotiations to achieve an expeditious conclusion of the initial tranche of the BTA.India was negotiating with an American delegation led by the Assistant US Trade Representative, Brendon Lynch, in New Delhi. Both sides are engaged in focused discussions to facilitate greater market access, reduce tariff and non-tariff barriers, and enhance supply chain resilience and integration.Earlier, Commerce and Industry Minister Piyush Goyal had said that India and the US intend to give preferential market access to businesses, even as both countries will continue working bilaterally to resolve issues like tariffs on Aluminium and Steel. Sources had indicated that an interim deal seems possible before the first tranche of the proposed bilateral trade agreement (BTA).On May 21, government officials had indicated that India is aiming for full exemption from 26% additional tariffs in the interim trade deal being discussed with the United States, which is being aimed at before July 9 to avert the applicability of reciprocal tariffs, which are currently paused by the world’s largest economy.Stating that goods and digital services are likely to be a part of an interim trade deal with the US, government officials had pointed out that the Trump administration doesn’t have the authority to bring tariffs lower than the MFN (most-favoured nation) rate, which will require approval from the US Congress. However, the US government can remove reciprocal tariffs for several countries, including India. The US is also seeking concessions in certain industrial goods, automobiles, wines, petrochemical products, dairy, and other agricultural products.Officials had said that India is also aiming for Minimum Import Price (MIP) or import quotas in sensitive sectors like dairy and agriculture as part of the deal, adding that India also wants 5% to 7% Basic Customs Duty (BCD) to be cut for its exports of labour-intensive products like leather. India and the US are looking to double their bilateral trade to $500 billion by signing the 1st tranche of a mutually beneficial multi-sector bilateral trade agreement (BTA) by October 2025.
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