India-US trade deal negotiations pushed beyond Donald Trump's deadline

Amid persistent uncertainty over an interim trade deal between India and the United States (US), the next round of formal negotiations has been pushed beyond the August 1 deadline. “The next formal round of talks is now scheduled to take place in the second half of August in New Delhi,” a senior government official told Business Standard, adding that both sides were currently engaged in virtual talks.

 

A team of officials from Washington DC will visit India for a sixth round of negotiation, around a month after negotiators from both sides wrapped up the fifth round of talks in Washington last week.

 

The official cited above said there was currently no clarity whether both sides would be able to seal an interim trade deal before August 1 — the date set by US President Donald Trump for double-digit reciprocal tariffs to kick in.

 

India could face up to 26 per cent reciprocal tariff from August 1 if no agreement is reached by then. 

 

In its offer so far, India has avoided including many politically sensitive agricultural items in the deal, despite US insistence. New Delhi is also pushing hard for exemptions from reciprocal tariffs as well as additional sectoral tariffs on aluminium, steel, automobiles, and copper.

 

Differences over certain issues have prolonged discussions. Agriculture and dairy remain key sticking points, with Washington pressuring India for greater market access.

 

Government officials had indicated that even if both sides were not able to bridge the gaps for an interim deal by August 1, talks would continue towards the finalisation of the first tranche of the bilateral trade agreement (BTA) by fall of 2025 (September-November). “India and the US will continue discussions towards the first phase of the BTA,” the official cited above said.

 

Meanwhile, officials from the US administration have indicated that they would continue to hold discussions with trading partners beyond the August 1 deadline. On Sunday, US Commerce Secretary Howard Lutnick had said that August 1 would continue to be the “hard deadline” for countries to pay the new, higher tariffs. However, “nothing stops countries from talking to us after August 1”, he added.