Daijiworld Media Network – Washington
Washington, Jul 3: An interim trade deal between India and the United States is likely to be sealed within the next 48 hours, with intense negotiations underway in Washington, sources told NDTV on Thursday. The push to finalise the pact comes as the July 9 deadline looms, after which the suspended 26% reciprocal tariffs are set to be reinstated.
India’s trade team extended its stay in Washington to resolve final differences. At the heart of the standoff are US demands for market access to genetically modified crops and India’s agriculture and dairy sectors — red lines for New Delhi due to concerns over food safety and rural livelihoods. Sources say these sectors are likely to be excluded from the final agreement.
India is instead pressing for tariff cuts on labour-intensive exports such as footwear, garments, and leather, which are major job-generating industries. Without significant concessions, Indian negotiators argue that 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 could double within three years," said Ajay Sahai, CEO of the Federation of Indian Export Organisations (FIEO).
The proposed deal, now centred around reciprocal tariff reductions, follows US President Donald Trump's remarks on Tuesday, where he stated, “I think we are going to have a deal with India... with much less tariffs.”
The deal is also expected to prevent the automatic return of punitive duties imposed during Trump’s earlier term, which were temporarily suspended for 90 days. A senior official warned that failure to conclude the deal would lead to immediate reinstatement of the 26% tariff structure.
However, sources suggest India may not suffer significantly even if the talks fall through, as its competitors already face similar or higher tariffs.
India’s tough stance reflects the political sensitivity of its farm sector, which is dominated by smallholder farmers. The country has never opened its dairy sector in any prior free trade deal, and is unlikely to do so under US pressure.
Both sides remain hopeful, with officials working towards a narrowly focused, win-win agreement that could serve as a stepping stone toward a broader Bilateral Trade Agreement (BTA) in the future.