India and US discuss trade deal before tariff deadline

An Indian team, led by chief negotiator Rajesh Agarwal, has arrived in the United States to work on a temporary trade agreement before July 9, 2025. This deadline is critical because the US plans to impose higher tariffs on Indian goods if no deal is reached. The talks aim to resolve issues related to duties on auto parts, steel, and farm products, which have caused disagreements.

In February 2025, Indian Prime Minister Narendra Modi and US President Donald Trump agreed to finalize the first phase of a trade deal by autumn and boost trade to $500 billion by 2030, up from $191 billion in 2024. India wants the US to remove a proposed 26% tariff and reduce existing taxes on steel and auto parts. Meanwhile, the US is pushing for lower tariffs on its farm exports, but India is cautious due to concerns about its farmers and industries like pharmaceuticals.

Despite earlier optimism, the negotiations are stuck. Indian officials say they’re willing to offer tariff cuts on items like almonds, pistachios, walnuts, and benefits for US imports in energy, autos, and defense. However, they’re firm on not rushing into a deal that doesn’t balance both sides’ needs. If no agreement is reached by July 9, tariffs could disrupt trade, with the US planning a 10% base tariff, 50% on steel and aluminum, and 25% on autos.