India-US trade talks extended as deadline looms for interim deal, say sources

Many Indian exporters delay US-bound shipments over tariffs
| Photo Credit:
Eduardo Munoz

Trade talks between Indian and US officials have been extended into next week as both sides seek consensus on tariff cuts in the farming and auto sectors, aiming to finalise an interim deal before a July 9 deadline, Indian government sources said.

A US delegation led by senior officials from the Office of the United States Trade Representative (USTR) held two days of discussions in New Delhi with Indian trade officials headed by chief negotiator Rajesh Agrawal, the sources said.

“The two countries are actively engaged in focused discussions to facilitate greater market access, reduce tariff and non-tariff barriers, enhance supply chain resilience and integration,” one Indian government official with direct knowledge of the talks, said.

Negotiators, who had initially aimed to wrap up talks by Friday, will now continue discussions on Monday and Tuesday to resolve outstanding differences, a second Indian official said.

US President Donald Trump and Indian Prime Minister Narendra Modi had agreed in February to conclude a bilateral trade pact by fall 2025 and more than double trade to $500 billion by 2030.

The current talks are part of efforts to hammer out a limited trade agreement that could lead the Trump administration to revoke 26 per cent reciprocal tariffs on Indian goods – tariffs that have been paused along with those on several other US trading partners for 90 days, the second official said.

“Many Indian exporters have held back shipments to the US in the last two weeks, fearing cargos may not reach before the July 9 deadline,” the official added.

India’s exports to the US jumped nearly 28 per cent year-on-year to $37.7 billion in the January–April period, driven by front-loading of shipments ahead of tariff hikes in April, while imports rose to $14.4 billion, widening the trade surplus in India’s favour, according to US government data.

India approved a licence for Elon Musk’s Starlink to launch commercial operations, ignoring his public spat with Trump, Reuters reported on Friday.

India is opposing US demands to open up its agricultural and dairy markets, another Indian official said, citing the impact on millions of poor farmers who cannot compete with heavily subsidised American products.

Indian officials have also made it clear New Delhi could pursue its complaint at the World Trade Organisation against the US tariff hikes on steel and aluminium, while aiming to work out a bilateral agreement, the source added.

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Published on June 6, 2025