The US team's delegation has planned a visit to India during the latter half of August to conduct the sixth round of negotiations on the proposed bilateral trade agreement. This comes after the fifth round of face-to-face discussions, which took place in Washington and concluded recently.
Certain quarters had hoped for an interim ‘mini-deal’ to be worked out before August 1, the date fixed for reciprocal U.S. tariffs to come into place under the Trump administration. However, even recent news updates indicate that achieving this goal seems to be a stretch now, definitely before the stated deadline.
Unless an agreement can be reached, the Trump administration will trigger tariffs, already temporarily blocked, of up to 26 percent on imports from India, starting August 1.
There are still differences over tariff cuts on several key Indian exports, including agricultural products, dairy, steel, aluminum, and automobiles. India's reluctance is especially evident when it comes to reducing tariffs on sensitive areas like dairy, whereas the United States is seeking market access for GM crops, industrial products, electric vehicles, and more.
With an interim agreement now highly unlikely before August 1, government officials from both nations are said to be looking into some options to postpone the more contentious issues, so that the fuller agreement can be attained in September or October.
In the first quarter of FY2025, India's merchandise exports to the U.S. increased by almost 23%, reaching $25.5 billion, while imports rose by 12% to $12.9 billion. The tariff imposition would create significant obstacles in sectors such as gems and jewellery, textiles, pharmaceuticals, and auto parts.
The uncertainty could not prevent an endeavor toward at least an interim agreement. This would, upon a successful conclusion, at least halt the threat of tariffs and set the stage for a full Free Trade Agreement (FTA) to be worked on later this year.
To summarize, the crucial period would be the visit of the U.S. delegation in August, and the results from that round could decide whether the tariffs are put into effect as planned on August 1, or whether the two countries continue negotiations toward a longer-term agreement in the following months.