India and US race against time to finalize trade deal before July 8: GTRI

India Gazette

20 hours ago

New Delhi [India], June 27 (ANI): India and the United States are in the final stretch of critical trade negotiations, with just days remaining before the July 8 deadline that could shape the future of bilateral economic ties, according to Global Trade and Research Initiative (GTRI).
India's top trade negotiator is currently in Washington, and both sides are working to secure a limited agreement -- often referred to as a 'mini-deal' -- before the clock runs out.
The deadline is tied to President Trump's 90-day suspension of special country-specific tariffs, announced on April 2. If no agreement is reached by July 8, India could face renewed tariff pressures, although experts say a return to steep duties is unlikely.
The most likely outcome appears to be a scaled-down trade agreement modelled after the US-UK mini deal signed in May.
Under this plan, India would reduce Most Favoured Nation (MFN) tariffs on several industrial items, including automobiles -- a long-standing demand from Washington.
In the agriculture sector, India may allow limited access for U.S. products like ethanol, almonds, apples, avocados, wine, and spirits through modest tariff cuts and tariff-rate quotas.
However, India is expected to protect its most sensitive sectors, such as dairy, rice, and wheat, which directly impact rural livelihoods and food security for millions.
The deal may also include strategic commitments such as large-scale purchases of U.S. oil, liquefied natural gas (LNG), civilian aircraft, and nuclear energy equipment.
Additionally, India may face pressure to ease restrictions in multi-brand retail and import rules for remanufactured goods, potentially opening the door for companies like Amazon and Walmart.
In exchange, the U.S. would not re-impose the harsher 26 per cent tariffs announced earlier this year. Instead, a baseline 10 per cent tariff would apply to most Indian exports. However, the U.S. is not offering to reduce its own MFN tariffs on Indian goods, raising concerns over fairness and lack of reciprocity in the deal.
On the other hand, the talks could fail if the U.S. continues to push for deeper access to India's core agriculture sector or insists on allowing genetically modified (GMO) products.
India has firmly stated that such demands threaten food security and the livelihoods of over 700 million people in the country's agrarian economy.
While agriculture makes up a small portion of U.S. exports to India, Washington is pushing aggressively for market access.
Indian experts fear that any compromise could lead to future demands that weaken India's public procurement system and minimum support price (MSP) structure, critical parts of its farm policy.
If negotiations break down, it is uncertain whether President Trump will reintroduce the earlier 26 per cent tariffs. Trade analysts believe this is unlikely, as India was not among the most heavily targeted countries in the original tariff order. However, given Trump's unpredictable policy moves, nothing can be ruled out.
Regardless of the outcome, trade experts caution that India must hold its ground and insist on a reciprocal, balanced, and transparent agreement.
GTRI underscores 'Any trade deal with the U.S. must not be politically driven or one-sided; it must protect our farmers, our digital ecosystem, and our sovereign regulatory space.'
Earlier today, President Donald Trump hinted big trade deal with India soon.
'We're not going to make deals with everybody. Some we are just going to send them a letter, say thank you very much. You are to pay 25, 35, 45 per cent. That's the easy way to do it, and my people don't want to do it that way. They want to do some of it, but they want to make more deals than I would do,' he said.'
'But we're having some great deals. We have one coming up, maybe with India. Very big one. Where we're going to open up India, in the China deal, we're starting to open up China. Things that never really could have happened, and the relationship with every country has been very good' he added. (ANI)