India-US trade deal awaits Trump's nod ahead of July 9 tariff deadline

The first phase of the India-US trade pact is ready and awaits Trump's approval, with a possible signing before the July 9 deadline to avoid additional tariffs on Indian goods

The first stage of the India-US Bilateral Trade Agreement (BTA) is now ready and awaiting final approval from US President Donald Trump, according to a LiveMint report quoting sources. The interim deal has been cleared by US Trade Representative (USTR) Jamieson Greer and could be signed as early as July 8 -- a day before Trump's reciprocal tariff deadline.

 

The development comes after Indian negotiators, led by chief negotiator Rajesh Aggarwal, extended their stay in Washington beyond their initial schedule to bridge gaps over sensitive sectors, particularly agriculture. A key government official told LiveMint, “Indian negotiators did their best to convince their US counterparts about the domestic sensitivities involved in these sectors. To some extent, the USTR has agreed to India’s position on not fully opening up the agriculture sector. Now, it’s up to the US President to take the final call.” 

 

 

Agriculture, dairy, genetically modified (GM) seeds, and medical services remain points of contention, with the US seeking greater market access while India looks to protect its vulnerable sectors, as per the report.

India-US trade deal: Options on tariffs

The US, as per the report, has offered two alternatives on tariff reductions. If India agrees to the US’s demands in agriculture and related sectors, its exports could face an additional 10 per cent tariff. “If India agrees to US demands for greater market access in agricultural goods, dairy and seeds, then Indian goods may face only a 10 per cent additional tariff -- which, while not ideal, is still much lower than what other countries in the Asian region are facing,” a person aware of the talks told LiveMint.

 

If India refuses, tariffs could go up to 20 per cent, which includes the existing 10 per cent baseline and an extra 10 per cent under earlier US measures. Still, this would represent a 6 per cent relief from the earlier proposed 26 per cent duty.

Trump's deadline nears

The US President, speaking to reporters on July 4, confirmed he had signed multiple letters informing countries of upcoming reciprocal tariffs. “I signed some letters and they’ll go out on Monday, probably 12. Different amounts of money, different rates of tariff,” Trump said, without naming the countries.

 

Although the reciprocal tariffs are scheduled to take effect from August 1, the letters are expected to be sent out on July 8, giving India a narrow window to seal the deal before being hit by new duties.

India firm on agriculture, open on other fronts

Agriculture has been a central hurdle, with India unwilling to compromise significantly. A government official told The Indian Express that although India has maintained a strong stance on protecting domestic agriculture, it has expressed openness to reducing tariffs in other areas. 

 

India is pushing for better access for its leather, textiles, and footwear sectors, while resisting demands to lift restrictions on GM seeds and crops. Only Bt cotton is currently approved for cultivation in India, and no GM food crops are commercially grown.

US-India trade data

Commerce ministry figures highlight the growing trade with the US. In FY25, India’s exports to the US rose by 11.6 per cent to $86.51 billion, while imports increased by 7.42 per cent to $45.33 billion. However, US imports fell in May year-on-year, from $3.85 billion to $3.63 billion, while exports grew by 17.3 per cent, led by electronics and smartphones.

 

In contrast, India’s imports from China rose by 11.5 per cent in FY25 to $113.46 billion, while exports to China fell by 14.5 per cent, underscoring the trade imbalance.

 

The deal, if finalised, is likely to mirror elements from recent US trade agreements with the UK and Vietnam. While the US retained its 10 per cent baseline tariff in both those cases, it offered some reductions in additional duties. Trade watchers see the India-US agreement as a limited deal focused solely on goods, with services and labour excluded for now.

 

Despite the challenges, negotiators on both sides remain hopeful of concluding an agreement in time to avoid penalties. The ball now lies in Trump’s court.