India, US push for early harvest deal before 9 July tariffs

India and the United States have commenced a fresh round of trade negotiations this week in an attempt to seal an early harvest deal ahead of the 9 July deadline for proposed reciprocal tariffs by the Trump administration.

Officials familiar with the development said that a two-day round of discussions began on Thursday in Washington, led by India’s chief negotiator and special secretary (commerce) Rajesh Agrawal.

The immediate objective of the talks is to resolve key bilateral trade differences and secure an interim pact that will pave the way for a more comprehensive Bilateral Trade Agreement (BTA) by September-October 2025. Once the initial deal is concluded, both countries intend to proceed with discussions on a full-fledged Free Trade Agreement (FTA) aimed at doubling bilateral trade to $500 billion by the year 2030.

According to sources, the US side is particularly focused on India’s tariff and non-tariff barriers, which it views as a primary reason behind its widening trade deficit with New Delhi. American negotiators are reportedly pushing for significant concessions, including near-zero tariffs on a range of goods such as automobiles, medical equipment and agricultural products.

India, which recorded a $41.18 billion trade surplus with the US in 2024-25 as per official commerce ministry figures, has its own set of demands. Chief among them is the immediate withdrawal of reciprocal tariffs—10 per cent baseline duties already in force since April and an additional 16 per cent set to take effect from 9 July.

New Delhi is also pressing for the removal of steep safeguard duties imposed by the US on Indian steel, aluminium, vehicles and auto components.

Furthermore, India has sought assurances of reciprocity in Most Favoured Nation (MFN) tariff treatment.

If New Delhi is to bring down its MFN tariffs on American imports, it wants the US to reciprocate with equivalent market access for Indian goods.

Commenting on the progress, Agneshwar Sen, trade policy leader at EY India, noted: “The two sides are moving in the right direction. Given the urgency posed by the upcoming tariff deadline, an early harvest deal would help address pressing concerns while setting the stage for more comprehensive negotiations.”

A second expert, requesting anonymity, highlighted the looming threat of a 26 per cent cumulative tariff on Indian exports to the US market. “This includes the existing 10 per cent duty and the proposed 16 per cent addition. These are serious barriers, and some are already the subject of a dispute at the WTO,” the expert added.

US President Donald Trump, speaking on Friday, expressed optimism about striking a “very big trade deal” with India, hinting that negotiations were progressing well. “Everybody wants to make a deal… We have one coming up, maybe with India. Very big one. Where we’re going to open up India,” he said, while referencing the recent trade agreement signed with China.

Earlier this month, US trade negotiators visited India as part of ongoing discussions. The White House had issued reminders to trading partners, urging them to make their best offers ahead of the 9 July deadline.

“The United States Trade Representative sent this letter to all of our trading partners just to give them a friendly reminder that the deadline is coming up,” White House spokesperson Karoline Leavitt confirmed.

US Secretary of Commerce Howard Lutnick echoed the administration’s intent to recalibrate trade ties, emphasising the goal of boosting American exports to India and reducing the trade gap. “Both sides have found a place that really works for them,” he said.

With just days left before the reciprocal tariffs are activated, the ongoing talks are seen as critical to avoiding a major disruption in one of the world’s most important bilateral trading relationships.