• Negotiations between India and the US are expected to extend into fall 2025, missing the initial July deadline.
  • Sticking points include US tariffs on Indian steel and aluminum, and demands for greater access to India’s agricultural markets.
  • Both sides are exploring a phased "mini-deal" to prevent immediate tariff escalations.

Trade Talks at an Impasse

High-level officials from India and the United States met in early June to discuss key trade issues, but progress has been slow. The talks, initially slated for completion by July, are now expected to drag into fall 2025, according to people familiar with the negotiations. The delay underscores the complexity of resolving long-standing disputes over tariffs, market access, and digital trade barriers.

Tariffs and Trade Flows

The US recently hiked duties on Indian steel and aluminum imports to 50%, a move that has drawn sharp criticism from New Delhi. India’s exports to the US surged nearly 28% year-on-year in the first four months of 2025, as exporters rushed shipments ahead of potential new tariffs. Meanwhile, imports from the US totaled $14.4 billion during the same period. Indian officials have threatened reciprocal tariffs but are prioritizing a bilateral resolution to avoid a full-blown trade war.

Political and Economic Stakes

Prime Minister Narendra Modi and President Donald Trump have both emphasized the importance of reaching a deal, but neither side appears willing to back down on core issues. The US is pushing for greater access to India’s agricultural sector, while Indian farmers and industry groups are resisting. Digital trade is another flashpoint, with US firms lobbying against India’s data localization rules.

"The talks are productive, but sticky issues remain," said one official involved in the discussions, who asked not to be named. "Both sides will need to compromise to get this over the line."

What’s Next?

With the July deadline looming, negotiators are working on a stopgap "mini-deal" to prevent immediate tariff escalations. A comprehensive agreement, however, remains elusive. Failure to reach a deal could lead to renewed tensions at the WTO and further strain one of the world’s most consequential trade relationships.