India, US speed up trade talks as tariff deadline extended to August 1

Indian team may go to Washington for further discussions

India and the United States (US) are “trying to negotiate and finalise” a trade agreement, said Commerce Department Special Secretary and the proposed deal’s chief negotiator Rajesh Agrawal, amid Washington stepping up pressure on countries to lower tariff barriers and sign trade deals.

 

“We are trying to negotiate and finalise a deal with the United States of America. We are into negotiations, reviewing the ASEAN trade deal… The idea is now we are also integrating in a big way with the major trading partners across the world and major economies,” Agrawal said at an event organised by the Confederation of Indian Industry (CII) on Thursday.

 

It is learnt that a team of officials headed by Agrawal may head to Washington as early as next week to further discussions on the interim trade deal, as well as the first phase of the bilateral trade agreement (BTA) that both sides aim to finalise by the autumn of 2025. 

 

The visit assumes significance, considering the US has extended the date of implementation of the country-specific reciprocal tariffs by over three weeks to 1 August — giving room for further negotiations to finalise a trade deal.

 

Trump has been ramping up pressure on countries to lower tariff barriers by concluding trade agreements with the US. On Tuesday, he sent formal letters to 14 trade partners, primarily in Asia, threatening them with steep reciprocal tariffs ranging from 25 to 40 per cent from 1 August — leaving room for negotiations. A day later, he sent letters to seven more countries, in a push for trade deals. So far, India has been kept out of the list of 14 countries.

 

Earlier, the Trump administration announced reciprocal tariffs on countries, including 26 per cent on India, on 2 April. Subsequently, it announced a 90-day pause on those tariffs to negotiate trade deals while retaining a universal 10 per cent tariff on countries. 

   

Negotiators from India and the US held week-long discussions and exchanged their offers for an interim deal, after which Agrawal returned to New Delhi on 4 July.

 

In its offer, India has so far steered away from including several items from the politically sensitive area of agriculture in the deal — despite pressure from Washington. Indian negotiators have also bargained hard to avoid the reciprocal tariff levies while demanding lower tariffs for labour-intensive sectors such as textiles, leather and automobile components.

 

Earlier during the week, US President Donald Trump said that America is “close” to signing a trade deal with India, without divulging a specific date or details about the proposed agreement.