India to seal interim trade deal with US this week as tariff deadline nears

The interim trade deal comes as the Trump tariff deadline nears. The 90-day pause, announced on April 9, followed US President Donald Trump's sweeping tariffs on 100+ nations, including India

India is on track to finalise an interim trade deal with the United States as soon as this week to avoid US President Donald Trump’s reciprocal tariffs, the Financial Times reported.

 

The interim deal with the US would be among the first with a major US trading partner, and would mark an initial step towards a comprehensive bilateral deal between the US and India. The two countries have signalled their intent to finalise the first tranche of the full agreement by autumn.

 

This comes at a time when the deadline for the Trump tariff nears its end. The 90-day pause was announced on April 9, days after Trump announced sweeping tariffs on more than 100 countries, including India. The US imposed a 26 per cent tariff rate on Indian made goods, as compared to its 52 per cent tariff rate on US-made goods.

 

On Monday (local time), White House Press Secretary Karoline Leavitt confirmed that a deal between India and the US is to be finalised soon. Reiterating Trump’s stance, Leavitt said, “You’ll hear from the President and his team, his trade team, very soon, when it comes to India.”

 

Earlier on June 26, Trump confirmed a “very big deal” with India coming soon. This was after he signed a trade deal with China. Speaking at an event, Trump said, “Everybody wants to make a deal and have a part of it. Remember a few months ago, the press was saying, ‘You really have anybody of any interest? Well, we just signed with China yesterday. We are having some great deals. We have one coming up, maybe with India. Very big one. Where we’re going to open up India, in the China deal, we are starting to open up China.”

 

According to the Financial Times report, the deal is expected to spare its agricultural markets, including dairy and wheat, from the US tariffs. Citing an Indian government official, the report stated that there is “a lot of sensitivity” over its agricultural markets.

 

To bring down its trade surplus with the US, India agreed to import more natural gas from the US. The trade surplus for the financial year 2024-2025 stood at $41.2 billion. The two sides have also agreed to reduce tariffs on thousands of items.

 

The report also stated that India has managed to shield its dairy sector from foreign competition, including talks with the European Union. India’s dairy sector employs over 80 million people. Concerns have been flagged over foreign dairy products, which may come from cows that were raised on feed containing cattle products.