The India-US trade talks have reached a crucial stage, with both sides grappling to resolve differences before a major tariff deadline. With July 9 fast approaching, when the U.S. is set to impose tariffs. Plans to impose new reciprocal tariffs—the outcome of these negotiations will significantly impact future India-US trade relations. What seemed achievable earlier this year now looks far more complex.
What’s Blocking Progress in India-USA Trade Negotiations?
Tariffs and Market Access: The Sticking Points
The main hurdle in the India-USA bilateral trade pact discussions is disagreement over import duties and market access for specific goods. India has called for:
- The rollback of the proposed 26% reciprocal tariff on Indian goods
- Relief from existing USA tariffs on steel and auto components, which affect industries like manufacturing and automotive
In return, U.S. negotiators are demanding:
- Lower import tariffs on farm goods, including soybeans, corn, and related agricultural products
- Easier market entry for U.S. passenger vehicles and alcoholic beverages
- Removal of certain non-tariff barriers that limit American exports
Such clashing demands have led to a stalemate in the India-US trade talks.
India’s Stand: Balance Over Speed
Indian officials have stressed that while they’re eager to strengthen ties, they won’t rush into a one-sided deal.
India seeks a fair agreement that benefits both countries. We won’t settle for terms that could hurt our long-term interests,” said a senior official.
India has made goodwill offers, including:
- Tariff cuts on almonds, walnuts, and pistachios
- Preferential access for U.S. energy companies, automotive firms, and defence manufacturers
Despite this, American negotiators are holding firm on their demands, causing delays in finalising an interim India-US trade agreement.
Why the India-US Trade Talks Are Critical
The $500 Billion Vision for Trade
The stakes are high. Earlier this year, Prime Minister Narendra Modi and President Donald Trump laid out plans to:
- Complete the first phase of a bilateral trade agreement by autumn 2025
- Aim to grow India-U.S. trade to $500 billion by 2030, up from nearly $191 billion in 2024
Achieving this vision requires resolving issues in the ongoing India-USA trade negotiations, particularly those concerning import tariffs on auto components, steel, and agricultural goods.
India’s Strategy: Building Global Trade Resilience
While engaged in the India-US trade talks, India is also pursuing agreements with other key partners. These include:
- Advanced negotiations for a free trade agreement with the European Union
- Recently concluded India-U.K. FTA, aimed at boosting bilateral commerce
This multi-pronged approach helps India reduce its reliance on any single partner and better navigate changing global trade policies.
How New US Tariffs Could Affect Indian Exports
Indian Exporters Show Strength
Interestingly, despite a 10% hike in U.S. tariffs introduced earlier this year, India’s exports to the U.S. have increased. Between April and May 2025, exports reached $17.25 billion, up from $14.17 billion in 2024.
This performance highlights the competitiveness of Indian products, particularly in industries such as automotive components, steel, and agro-exports, compared to rivals from Vietnam and China.
Ready for Challenges
Officials say India is prepared for any scenario, even if new U.S. tariffs come into play. One policymaker noted,
India’s exporters are resilient. We’re ready for a fair partnership but won’t hesitate to protect our interests.”
The country’s efforts to diversify trade through free trade agreements and its focus on self-reliant manufacturing offer a strong buffer against external shocks.
The Road Ahead for India-US Trade Talks
Delegation Set to Continue Talks
An Indian trade delegation will travel to Washington, D.C., in the coming days. The immediate focus might shift from a rushed interim agreement to working on a detailed, comprehensive trade pact that can address both nations’ concerns.
Could Modi-Trump Talks Break the Deadlock?
While the current impasse is real, history shows that direct engagement by leaders like Modi and Trump can change the course of negotiations. Their intervention might help overcome the sticking points and move the India-US trade talks forward.
Conclusion: Balancing National Interest with Partnership
As the July 9 deadline nears, the India-US trade talks reflect the complexities of balancing national interests with the desire for a stronger partnership. The deadlock on issues like import tariffs on farm goods, auto parts, and steel is a reminder of the challenges of modern trade diplomacy.
Still, both countries recognise the value of their relationship, not just in trade but in defence cooperation, technology sharing, and regional security. Whether through a last-minute deal or longer-term discussions, the potential for deeper India-US trade relations remains strong.