India, U.S. Near Interim Tariff Deal as Deadline Looms

The United States and India work to complete an interim trade agreement which aims to decrease tariffs for agricultural products and automotive industries. The Office of the U.S. Trade Representative leads a U.S. delegation which now conducts private negotiations with Indian trade leaders in New Delhi. The discussions aim to reach a goal of increasing bilateral trade to $500 billion during the next decade.

Indian government sources indicate that a deal could emerge before July 9 when President Donald Trump sets his deadline. The trade discussions remain politically sensitive because Trade Minister Piyush Goyal might return from Italy to join the talks.

U.S. Commerce Secretary Howard Lutnick indicated on Monday that negotiations have advanced to a point where a final agreement can be reached soon. The Indian negotiators plan to reduce their average tariffs to 10% matching U.S. base rates while offering zero tariffs inside quota limits to gain expanded market access and supply chain advantages.

The Indian government opposes further farm and dairy market liberalization because it fears negative domestic political reactions. An Indian official stated that India plans to provide superior terms than those found in the UK agreement.

The trade ministry maintains silence about the talks but insiders predict an official announcement will follow the conclusion of discussions during this weekend.