India and the United States appear to be nearing an interim trade agreement amid ongoing global trade tensions and a rapidly approaching tariff deadline imposed by US President Donald Trump. The proposed deal, expected before the revised August 1 deadline, follows Trump’s announcement of reciprocal tariffs on multiple nations, including India. However, India has yet to receive a formal tariff notification, unlike over 20 other countries.
The two sides have held a series of meetings to iron out contentious issues. A new delegation from India’s commerce ministry is set to visit Washington soon to further the talks, with the focus on finalising an interim deal. While an initial base tariff of 26% was considered, the US is now looking to lower this to under 20%, a move that would grant India a competitive edge in the region.
President Trump has hinted that a trade deal with India is imminent, even as he continues to threaten BRICS nations with an additional 10% tariff for pursuing “anti-American” policies. India, in turn, has clearly outlined its non-negotiable positions, especially regarding agricultural and dairy concessions, GM food imports, and tariff protection on steel, aluminium, and auto products.
Commerce Minister Piyush Goyal reiterated India’s stand that any trade deal must prioritise national interest over deadlines. The interim deal, if signed, is expected to bypass contentious areas like agriculture and dairy, leaving them for the comprehensive agreement expected later this year.
Meanwhile, trade tensions persist at the WTO. The US has objected to India's dairy certification requirements, calling them trade barriers, while India is preparing retaliatory tariffs in response to earlier US duties on steel, aluminium, and autos.
Despite unresolved issues, signs of convergence suggest a limited deal may soon be announced. Such an agreement could pave the way for broader cooperation, reflecting the growing importance of bilateral trade between the world’s largest and soon-to-be fourth-largest economies.
