BTA’s first tranche is to be delivered by the fall of 2025. Photo credit: Egromov
US-India trade officials were unable to fill negotiations for an early trade contract after seven days of talks in New Delhi, but “some progress” was made towards a balanced agreement, sources said.
“The differences between the US demand for tariff reductions, particularly on agricultural products, and the need to protect India’s sensitivity, continued,” the source said.
However, authorities have set the stage for more deliberations for the Indian-US Bilateral Trade Agreement (BTA), focused on the July 9 deadline to help India avoid mutual US tariffs and sector-specific taxation.
“The negotiations with the US on June 4-10 were productive and helped us to make progress towards creating mutually beneficial and balanced agreements, including achieving early victory,” another source said, but it has not been specified when early benefits will be provided.
Both sides agreed to continue negotiations to achieve the prompt conclusion of the BTA’s first tranche, sources added.
India’s plans
India is ready to cut tariffs on many US products, and the list may include items such as cars, alcoholic beverages, certain fruits and nuts, chemicals, and more.
“But it is sensitive to areas such as agriculture, intellectual property, MSME products, and digital trade.
US President Donald Trump and his trade team are particularly keen to see India should provide tariff cuts and greater market access on most produce, even if it has certain restrictions such as quotas.
BTA talks must bring about a shrinking US trade deficit of more than $400 billion a year with India. To that end, New Delhi must defeat its “very high tariffs,” Washington argues.
However, India is not ready to lower tariffs on items such as rice and wheat. Because these are important to the country’s food security. I don’t want to reduce the tariffs on sensitive dairy products either.
“If tariffs are reduced in such contracts, it will be nearly impossible to raise again, even if prices are crashed, global trade is destroyed, or local farmers are facing sudden losses,” warned GTRI’s Ajay Srivastava.
India is ticking quickly for India as it could face a full blow to the 26% mutual obligation that Trump slapped on it if it fails to reach an early trade deal with the US on July 9. BTA’s first tranche will be available by fall 2025.
Trump’s tariffs
On April 2, Trump imposed mutual tariffs on most American trading partners, which hold a trade surplus. He then suspended the 90-day inverse tariff, excluding the 10% baseline tariff, allowing the country to resolve trade transactions.
“India not only wants to rewind the overall mutual tariff of 26%, but also advocates for the withdrawal of 25% sector-specific tariffs on steel, aluminum and automobiles, and also wants to reduce MFN (most favourable country) tariffs on labor-intensive products,” the first source said.
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Released on June 10th, 2025
