The round focussed on sorting out tricky issues, including tariff cuts in agriculture and automobiles, and talks may continue through the virtual mode for some time, sources said.
Trade teams from India and the US have wrapped up this week’s crucial round of negotiations for a bilateral trade agreement (BTA) in Washington DC ahead of the August 1 deadline for reciprocal tariff imposition by the US, sources said.
The round focussed on sorting out tricky issues, including tariff cuts in agriculture and automobiles, and talks may continue through the virtual mode for some time, sources said.
“The Indian negotiating team is on its way back from Washington DC. The talks for this round are over. It happened per schedule and there was no extension unlike the last round when the talks were stretched,” a source tracking the matter confirmed.
India and the US are negotiating a “mutually beneficial’’ BTA for which the agreed timeline is Fall 2025 (September-October) but efforts have been on to work out an interim deal to avoid US reciprocal tariffs on August 1.
US President Donald Trump had announced reciprocal tariffs on April 2 for most trade partners with which the US had a trade deficit and then suspended them till July 9, except for a baseline tariff of 10 per cent. A reciprocal tariff of 26 per cent was announced on India’s exports to the US.
As most countries, including India, could not reach an interim deal with the US by July 9, Trump decided to push back the tariff deadline to August 1.
“There is not much clarity on what Trump has in mind for India as there is a possibility that he may not be willing to withdraw the entire reciprocal tariff and may only lower the tariff rate. He did so in the case of Vietnam and Indonesia and also hinted that he had something similar in mind for India,” another source said.
Earlier this week, Trump said that a deal with India was on the way but he suggested that it may actually take the form of a letter from him prescribing the tariffs.
“We have another one (deal) coming up, maybe with India… We’re in negotiation. When I send out a letter, that’s a deal… The best deal we can make is to send out a letter, and the letter says that you’ll pay 30 per cent, 35 per cent, 25 per cent, 20 per cent… We have some pretty good deals to announce,” Trump said speaking to reporters on Wednesday.
India has been finding it difficult to meet demands for tariff cuts made across sectors by the US, including in agriculture, dairy and automobiles. In agriculture, the sticking point is market access for soybean and corn as the varieties grown in the US are mostly genetically modified (GM) and India does not permit it.
In the area of automobiles, the US wants similar market access offered to the UK under the India-UK FTA, but India is hesitant to agree to it as part of an interim deal.
“India wants to get market access in its area of interest in the US, which includes labour-intensive products such as textiles, leather and electronics, in return for the tariff cuts it offers to the US. It does not want a deal to be one-sided,” the source said.
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Published on July 19, 2025
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