• India and the US are making steady progress toward an interim trade agreement expected by late June 2025.
  • The deal aims to resolve key tariff disputes and set the stage for broader bilateral trade expansion.
  • Critical issues include India's push for full tariff exemptions and US demands for market access amid regulatory hurdles.

Momentum Builds in Bilateral Talks

Trade negotiators from India and the US have entered an intensive phase of discussions, with multiple high-level meetings occurring on both sides of the Atlantic. India's chief negotiator Rajesh Agrawal recently wrapped up four days of talks in Washington, while Commerce Minister Piyush Goyal held two sessions with US Commerce Secretary Howard Lutnick last week. Government sources familiar with the discussions describe the process as "on track," with a US delegation expected in New Delhi next month to continue negotiations.

The Tariff Countdown

At stake is the fate of a 26% reciprocal tariff currently suspended by the US until July 9, 2025. Both sides are racing against this deadline, with sources indicating the interim agreement could be finalized as early as June 25. While most Indian exports still face a 10% baseline US tariff, New Delhi is pushing for complete exemption from the additional duties, particularly for textiles and footwear exports. The US position remains constrained by Congressional requirements on Most-Favored Nation rates, though White House economic adviser Kevin Hassett recently signaled progress with India among select trading partners.

Structural Hurdles Remain

The emerging deal would cover goods and digital services while laying groundwork for a comprehensive Bilateral Trade Agreement. However, sticking points persist - notably India's resistance to genetically modified crop imports due to domestic certification requirements. The Global Trade Research Initiative has cautioned New Delhi about potential pitfalls following recent US court rulings on reciprocal tariffs. Meanwhile, both governments maintain ambitious targets to double bilateral trade to $500 billion by 2030, with this interim pact seen as crucial first step.