A US delegation is set to arrive in New Delhi on August 25 for the sixth round of trade talks with India. These discussions are crucial as both nations race to finalize an interim trade deal before the looming August 1 tariff deadline, when the suspension of US-imposed tariffs is slated to expire.
Key Issues on the Table
- India’s Demands: India is pushing for the removal of an additional 26% US tariff and better market access for its labor-intensive exports, including textiles, leather, chemicals, and some agricultural products. They also seek reduced duties on steel (currently 50%), aluminum, and automobiles (currently 25%).
- US Priorities: The US is advocating for duty concessions on industrial goods, electric vehicles, wines, petrochemical products, and critically, greater access to India’s agriculture and dairy markets.
- Sticking Points: A major point of contention is the US’s demand for access to India’s traditionally protected agriculture and dairy sectors. Farmers’ groups in India have urged the government to exclude agriculture from the pact. India has historically not offered duty concessions in the dairy sector in any free trade agreement.
The Negotiators and Timeline
The fifth round of talks, which concluded last week in Washington, was led by India’s chief negotiator Rajesh Agrawal (Special Secretary in the Department of Commerce) and US Assistant Trade Representative for South and Central Asia Brendan Lynch.
While the US team is visiting on August 25, well after the August 1 deadline, both sides are still actively discussing ways to reach an interim deal before August 1. Beyond this immediate goal, both countries aim to wrap up the first phase of the Bilateral Trade Agreement (BTA) by September-October 2025.
Broader Implications
US Trade Representative Jamieson Greer has acknowledged the complexity of these negotiations, citing India’s long-standing protection of its domestic market. Despite this, Commerce Minister Piyush Goyal remains optimistic about reaching an agreement, emphasizing India’s commitment to national interests.
The outcome of these talks, particularly regarding the August 1 deadline, will significantly shape future trade relations between India and the US, with potential impacts on key export sectors if tariffs are reimposed.