India is not desperate for an ‘interim’ trade deal with the US before the 9 July 2025 deadline, commerce ministry sources have said.
An official from the ministry said that though the efforts are on for closure of a deal before the deadline, however, India will not compromise on its interest in order to finalise an early deal.
The official said that talks are on, and a team of India negotiators will soon go to the US for further talks. He said that the original deadline for completion of the first tranche remains September-October, but the Indian government is hoping for an early ‘interim’ deal to avoid the 26% reciprocal tariff that the US government has threatened India with.
According to sources, dairy and agriculture remain the most contentious issue between the two nations. He said that while India would be happy to keep the two – agriculture and dairy – out of the trade negotiation talks for now, the US may not agree to it.
The trade talks between the two countries will be in multiple phases, government sources have said, but the current target is to have an ad hoc deal to avoid reciprocal tariff.
The US has threatened India with a 26% reciprocal tariff, but it had extended the deadline for implementing the same till 9th July. As of now, goods exported to the US attract a 10% levy. However, some goods like steel and aluminium already attract 50% tariff – a decision against which India has moved the World Trade Organisation (WTO), and even threatened retaliatory tariff.
US president Donald Trump on several occasions made it public that India and the US are close to signing a trade deal, raising hope that the two countries might reach an interim trade deal. The US president has also claimed that India has decided to drop all tariffs on US goods, a statement denied by India.
The escalation in Iran, Israel conflict and the US intervention may put a question mark over the quick closure of an agreement between India and the US.
The US has already announced a trade deal with the UK and China – though the finer details of the two deals are not public yet. India has also signed a free trade agreement with the UK.
The US has a trade $41 billion trade deficit with India, and the former wants the deficit to narrow down.