India and the United States are engaged in high-level discussions this week, with the objective of finalizing tariff reductions in sectors such as agriculture and automobiles as part of an interim agreement, according to two government sources. An announcement is anticipated later this month.A delegation from the United States, led by senior officials from the Office of the United States Trade Representative (USTR), has commenced closed-door discussions in New Delhi that will last for two days. During this round of negotiations, the parties are addressing tariff reductions in specific sectors, including agriculture and automobiles, as well as proposed advantages for Indian companies.The formal announcement of the deal may occur by the end of the month, ahead of the self-imposed deadline of July 9 set by President Trump. However, a statement is expected to be released once the meetings conclude, potentially by Sunday. Trade Minister Piyush Goyal, who is currently in Italy, may return to engage with the delegation, as noted by the official. The officials requested anonymity due to the sensitive nature of the discussions. The Indian trade ministry has not responded promptly to requests for comments. US Commerce Secretary Howard Lutnick stated in Washington on Monday that trade negotiations are advancing and a deal could be finalized shortly.
India and the United States reached an agreement in February to pursue a phased deal, with the goal of increasing bilateral trade to $500 billion by 2030.Officials indicated that India, encouraged by its recent trade agreement with the United Kingdom and ongoing discussions with the European Union, is resisting US demands to open its agricultural and dairy markets, citing the potential for rural backlash. “We are prepared to offer a more favorable deal than the UK agreement, with average tariffs reduced to 10%, aligning with the US base rate, and near-zero duties with quotas in exchange for market access and supply chain connections,” stated another official.Washington has highlighted India’s average agricultural tariff of 39%, with certain duties reaching as high as 45-50%. Additionally, it is urging India to permit corn imports for ethanol production.Bilateral trade with the United States, which is India’s largest trading partner, increased to $129 billion in 2024, with India recording a surplus of $45.7 billion.
