As Trump's Tariff Clock Ticks, India And US Rush To Seal $500 Billion Trade Pact

With time running out on a critical tariff deadline, India and the United States are making a last-minute push to conclude an interim trade pact that could set the stage for a broader $500 billion bilateral trade vision by 2030. Following four days of closed-door discussions in New Delhi, negotiators from both countries wrapped up what insiders described as one of the most productive rounds of talks yet.

The discussions, led by Rajesh Agrawal from India's commerce ministry and officials from the Office of the US Trade Representative, focused on easing market access for key industrial and agricultural products, reducing tariffs, and tackling non-tariff barriers.

"The negotiations held with the US side were productive and helped in making progress towards crafting a mutually beneficial and balanced agreement including through achievement of early wins," a senior government source told Reuters.

Beyond goods, digital trade emerged as a critical area of convergence. Sources said both sides discussed initiatives to streamline customs and trade facilitation, with the intention of finalising a preliminary segment of the larger deal soon. Talks are expected to intensify in the coming days.

Sticking Points Remain

Despite the progress, major hurdles remain. India pushed back against US demands to open its market to wheat, dairy, and corn imports, but offered tariff reductions on select high-value American exports like almonds, pistachios, and walnuts. India also asked Washington to roll back a 10% baseline tariff imposed during the Trump administration under emergency provisions — a demand the US side resisted, arguing the same tariff also applies to allies like the UK.

Steel duties were another flashpoint. India sought relief from 50% tariffs on its steel exports. In return, New Delhi expressed willingness to ramp up purchases of American energy — including LNG, crude oil, and coal — and expand defence imports.

Deadline Diplomacy

With the G7 Summit just days away, where Donald Trump and Prime Minister Modi are expected to meet, both nations are eyeing a symbolic signing of an initial deal on the sidelines. Sources say June remains a target month for sealing the first phase.

Facing domestic criticism for abrupt trade actions, Trump is reportedly eager to showcase progress before the end of a 90-day pause on reciprocal tariffs — a window that, if closed without a deal, would trigger a steep 26% duty on Indian exports like textiles, footwear, rice, and shrimp.

Two Tracks, One Goal

Even as Indian negotiators worked with the US in New Delhi, Commerce Minister Piyush Goyal was in Switzerland, leading separate talks on another major trade pact with the European Union — India's second-largest trading partner.

On the US negotiations, Goyal said India is ready to move forward "by first addressing simpler issues", while deferring more contentious points to future phases. Government officials indicated that an interim deal is likely, with the next tranche of the agreement expected by September or October.

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