Officials familiar with the talks say India and the US are working hard to approve an interim trade agreement by June 25. Negotiators aim to work out details of tariffs and establish a base for a wider trade deal expected this year. Both countries have held many key meetings to help speed up the process. Rajesh Agrawal, Special Secretary of Commerce in India, just finished a four-day visit to the US, during which he talked with American officials to describe the terms for the interim agreement.
Piyush Goyal, Commerce and Industry Minister, met Howard Lutnick, the US Commerce Secretary, to help the trade talks gain further ground. It is likely that if the interim agreement is reached, the US may cancel its 26% tariff on selected Indian goods. The tariff became active on April 2, 2025, but is being suspended until July 9. Even now, goods exported from India to the US must pay a tariff of 10%, a point that concerns Indian negotiators.
India is requesting that New Delhi be fully exempt from the 26% reciprocal tariff in the temporary deal. Those in charge of Indian trade claim that removing this back-tax will ease the costs for senders and boost India's position in the US market again. As part of the agreement, the US is hoping that India lowers tariffs.
Negotiators from India are seeking to reduce duties on imports of goods made in industries that use mostly labor. Exports from Canada consist of textiles, clothing, gems and jewellery, items made from leather, shrimp, some chemicals, grapes, and bananas. They are crucial for India's export development and provide jobs to people.
The US is requesting lower tariffs on items that include both non-electric automobiles and electric vehicles, wines, dairy products, tree nuts, and GM crops. Still, importing GM agricultural materials is not allowed under India's present agrarian policy. Discussions about using Alpha alpha hay, instead of GM products, are open for exploration in New Delhi.
Both Canada and the EU are aiming to reach the first part of a full bilateral trade agreement before fall 2025. It is expected that by 2030, bilateral trade will reach $500 billion. It is an essential step forward for strengthening economic cooperation between the world's most important democracies. For the year 2024/25, India's total trade with the US reached $131.84 billion, helping the US keep its position as India's top trading partner.