US President Donald Trump on Tuesday reaffirmed that a new India-US trade deal is on the horizon, emphasizing that the agreement would involve “much less tariffs” and allow both countries to compete fairly in each other’s markets.
“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… we are going to have a deal for much less tariffs,” Trump said during a media interaction.
Negotiations between the two countries are intensifying as they approach the July 9 deadline—the end of a 90-day pause on suspended 26% reciprocal tariffs initially imposed during Trump’s earlier tenure. Without a deal, these tariffs are set to automatically resume, posing a risk to critical bilateral trade flows.
A senior official cautioned, “Failure to finalize the trade discussions would trigger the immediate reimplementation of the 26% tariff structure.”
The Indian delegation, led by Chief Negotiator Rajesh Agrawal, has extended its stay in Washington beyond the initially scheduled talks. India is maintaining a firm stance on agricultural issues, given the sensitive nature of its farming sector, which is heavily reliant on small-scale subsistence farmers.
Notably, India has never opened its dairy sector in any previous free trade agreement and remains cautious amid US pressure to do so.
The US, on its part, is pushing for lower duties on agricultural exports like apples, tree nuts, and genetically modified crops, while India is seeking preferential access for its labour-intensive exports such as textiles, gems and jewellery, leather goods, and shrimp and bananas.
While the current focus is on sealing an interim agreement, both sides are working toward a comprehensive Bilateral Trade Agreement (BTA), with the first phase targeted for completion by Fall 2024.
The broader goal is ambitious: to more than double bilateral trade from the current $191 billion to $500 billion by 2030, reflecting the growing strategic and economic convergence between the world’s largest and fifth-largest economies.