A high-level Indian delegation has arrived in Washington to begin a week-long round of negotiations with the United States, marking a pivotal phase in ongoing efforts to forge a new bilateral trade agreement. The talks come at a critical juncture, with trade officials from both countries under pressure to secure outcomes ahead of an August deadline for new tariffs and amidst mounting expectations from major export and industrial sectors.
Senior officials from the Ministry of Commerce and Industry, led by chief negotiator Rajesh Agrawal, will be meeting their American counterparts to finalise the contours of what sources describe as both a potential interim “mini deal” and preparations for a more comprehensive free trade agreement later this year.
Key sticking points in the discussions continue to revolve around the US demand for greater market access in agriculture, dairy and automobile sectors, as well as calls for a reduction in tariffs on key American exports. India, meanwhile, seeks relief from planned reciprocal US tariffs on its exports, along with additional concessions for its labour-intensive sectors such as textiles, gems and jewellery, leather goods and chemicals.
Negotiators have signalled that while both sides are eager to avoid the reimposition of steep tariffs—particularly the 26 percent additional US duties which are set to take effect if no deal is reached—substantial differences remain over sensitive items, especially agricultural produce and dairy products. Protection of Indian farmers and the livelihoods of millions in the rural economy has emerged as a central concern, with New Delhi resisting pressure to open markets to American dairy and certain agricultural products. Cultural and religious sensitivities have also surfaced, with India refusing to allow imports of dairy products derived from cattle fed on non-vegetarian diets.
A phased approach is being pursued, with expectations that talks this week will enable both sides to announce an interim agreement covering less contentious sectors, including tariff relief for specific US industrial goods, and potentially higher Indian imports of American oil and defence equipment. A broader free trade agreement encompassing services, digital trade and expanded market access is scheduled to be negotiated in subsequent rounds, with the aim of doubling bilateral trade to $500 billion by 2030.
Officials have described the current discussions as positive and constructive, with both countries committed to seeking mutually beneficial outcomes. However, the outcome remains uncertain, with India maintaining that no deal is preferable to a bad one that could endanger domestic industries and jobs.
The United States remains India’s largest trading partner, accounting for 18 percent of India’s overall exports and over $190 billion in annual bilateral trade. The next week’s outcome could have significant implications for exporters and consumers in both countries, as well as for the global trading environment.
