Mini Trade Deal With US In 48 Hours, India Pushing For Concessions: Sources

An interim trade deal between India and the United States is likely to be finalised in the next 48 hours, with negotiations underway in Washington, sources told NDTV on Thursday. India's trade team extended its stay in Washington last week to iron out key differences as the two sides look to clinch a mini deal before the July 9 deadline when the pause on US tariffs is set to be lifted.

Both sides have dug in their heels over a number of issues, including Washington's demand that India open its market to genetically modified crops - a long-standing red line for New Delhi due to risks to its farmers.

The US is also pressing for greater market access to the Indian agricultural and dairy sectors. However, sources told NDTV Profit that both these sectors are likely to be kept out of the purview of the proposed deal due to concerns over rural livelihoods and food safety.

India, on the other hand, is reportedly pushing for meaningful tariff concessions on its labour-intensive exports like footwear, garments, and leather, which are major job creators.

New Delhi is unwilling to sign a deal that doesn't address both sectoral access and reciprocal tariffs on its exports, with negotiators maintaining that without broader tariff cuts, especially on high-employment goods, the goal of doubling bilateral trade to $500 billion by 2030 is unrealistic.

"Our estimate is that once the Interim India-US Trade Deal is finalised, Indian exports to the US will double within the next three years," Federation of Indian Export Organisations (FIEO) CEO Ajay Sahai told NDTV.

Per the NDTV profit report, the focus of the deal has narrowed to reciprocal tariff reductions or removals, as officials have called on both nations to prioritise lowering overall duty barriers.

On Tuesday, US President Donald Trump reaffirmed that India-US will soon strike a trade deal with "much less tariffs", allowing both countries to compete.

"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," Trump said.

India-US Trade Deal

India and the US have been negotiating over a Bilateral Trade Agreement (BTA) before the return of suspended 26 per cent reciprocal tariffs after the critical pause is lifted.

These punitive measures, imposed initially during the Trump administration on April 2, were temporarily suspended for 90 days but will automatically resume if no agreement is reached.

"The failure of these trade discussions would trigger the immediate reimplementation of the 26 per cent tariff structure," a senior official told news agency ANI.

However, some sources said that even if a deal is not finalised, India won't suffer much because a 26 per cent tariff is low compared to our competitors.

India's hardened position reflects the politically sensitive nature of its agricultural sector. The country's farming landscape is dominated by small-scale subsistence farmers with limited land holdings, making agricultural concessions particularly challenging from both economic and political perspectives.

India has also never opened its dairy sector to foreign competition in any previous free trade agreement -- a precedent it appears reluctant to break even under US pressure.

Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri told NDTV: "We had a meeting with Commerce Minister Piyush Goyal recently. We hope the US would agree to reduce Reciprocal Tariffs on labour-intensive sector like Apparel. Government is pushing for a lower tariff on labour-intensive sectors such as the Apparel Export Sector. We expect a differential tariff structure on different Apparel products...We hope for a good deal. Our estimate is that after the implementation of  proposed "Interim Trade Deal", BTA and the removal of MFN Tariff rates, the export of Apparel from India to the US would increase from existing US$ 5.2 billion to upto US$ 15-billion by 2030".

Indo-American Chamber of Commerce Executive Council Member Sunil Jain told NDTV on the proposed India-US Interim Trade Deal: "The proposed India-US "Interim Trade Deal" is almost through. But negotiations are still going on on the US demand that India should lower tariffs on import of Agriculture and Dairy products. India doesn't allow the import of GM Agricultural products and has serious concerns on this issue. India is insisting for Tariff concessions on export of Auto Components. US has concerns on giving Tariff concessions on export of Steel and Aluminum products".