With the deadline for US reciprocal tariffs looming on August 1, Indian trade negotiators are set to travel to Washington next week to resume discussions aimed at finalising an interim trade deal focused on goods, particularly agriculture and the automobile sector.
The Indian delegation, led by Special Secretary Rajesh Agrawal from the Ministry of Commerce and Industry, had returned from their last round of talks on July 4, just ahead of the earlier tariff pause deadline of July 9.
That pause has now been extended, giving both countries a brief window to resolve outstanding issues.
“The proposal for another round of trade negotiations with the US has been sent to the top levels of the government,” a senior official told The Indian Express. “There is already a broad consensus on agriculture between the teams, and negotiators are confident the remaining points of contention will also be resolved.”
While the Commerce Ministry has not issued an official statement, the upcoming talks are viewed as crucial in avoiding the re-imposition of steep US tariffs - up to 26 percent - on Indian goods that were first announced in April.
The US Trade Representative recently stated there would be "no extension" beyond August 1.
Although President Donald Trump has indicated that a trade deal with India is "close", he has also unveiled new tariffs ranging from 25% to 50% on nearly 20 countries, including Brazil, South Korea, and Malaysia, raising the stakes for India.
Speaking at a Confederation of Indian Industry (CII) event, Agrawal confirmed that India is actively pursuing free trade agreements (FTAs) with several countries. “We have just concluded a deal with the UK. We are in the advanced stage of our negotiations with the EU. We are trying to negotiate and finalise a deal with the US,” he said.
Agrawal noted that India is expanding its trade footprint globally, with ongoing or completed FTAs with Australia, the UAE, Chile, Peru, and New Zealand, among others. He added that India is also reviewing its trade agreement with ASEAN.
Negotiators from India have reportedly offered significant market access to the US across various sectors, except for sensitive ones such as dairy and certain agricultural products.
In return, the US may lower tariffs on Indian exports like textiles, footwear, and other labour-intensive goods, while pausing any further tariff actions against India.
The proposed trade deal is expected to focus solely on market access in goods, not services or labour, and will likely prioritise sectors such as agriculture and automobiles - where both sides are negotiating hard.
A senior Indian official recently clarified that India is not involved in any practices like third-country goods rerouting, unlike other nations that have faced severe tariffs from the US. “All possibilities are open, and India will sign the deal only when it is mutually beneficial,” the official said.
While steel tariffs remain off the table - given the US’s reluctance to offer relief to any country - India has taken measures like safeguard duties to support its domestic industry and is leveraging its comparative advantage in labour-intensive sectors to gain concessions.