Negotiations between India and the United States for an interim trade deal have entered the final stretch, with sources indicating that an agreement could be finalised within the next 48 hours. The Indian trade delegation has extended its stay in Washington to resolve key differences as both sides work to conclude the deal before the July 9 deadline, when the 90-day pause on reciprocal tariffs expires.
A major point of contention remains Washington’s push for access to India’s agricultural and dairy sectors, along with the demand to open Indian markets to genetically modified crops. These proposals have faced firm resistance from New Delhi, which has consistently cited the economic and social risks such access could pose to its rural communities.
According to reports, both the agriculture and dairy sectors are likely to remain outside the scope of the current deal due to concerns over food safety and rural livelihoods.
India Seeks Tariff Relief for Labour-Intensive Exports
India’s negotiating team has emphasised the need for tariff concessions on its labour-intensive exports such as garments, footwear, and leather. These sectors are critical for employment generation, and Indian officials have reportedly insisted that any interim deal must include reciprocal benefits to boost exports.
The current focus of the deal has shifted toward mutual tariff reductions, with officials on both sides calling for a balanced framework that would lower overall duty barriers.
ALSO READ: Why Foxconn is pulling out its Chinese workforce from India
President Donald Trump reaffirmed his commitment to a deal earlier this week, stating, “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, and if they do that, we are going to have a deal for much less tariffs.”
Tariff Deadline Looms as Stakes Rise
Failure to reach a deal by July 9 will trigger the automatic reimposition of the suspended 26 per cent reciprocal tariffs that were first introduced on April 2.
However, some officials maintain that the impact on India would be manageable, as a 26 per cent tariff remains lower than those faced by many of its global competitors.
India’s firm stance reflects the political and economic sensitivities tied to its agricultural sector. With a farming population largely composed of small and marginal landholders, the government is wary of any trade agreement that could disrupt rural livelihoods. India has also consistently excluded the dairy sector from previous free trade agreements and appears unlikely to alter that precedent, even under pressure from Washington.
