India and the US are engaged in negotiations for an interim trade deal and are trying to finalise the pact before July 9, sources said on Monday.
For the next round of talks, the Indian team may visit the US soon to discuss both the interim and first tranche or phase of the proposed bilateral trade agreement, they added.
The high tariffs, announced by the US on April 2, were suspended by the Trump administration till July 9.
On April 2, the US imposed an additional 26% reciprocal tariff on Indian goods but suspended it for 90 days. However, the 10% baseline tariff imposed by America remains in place. India is seeking full exemption from the additional 26% tariff.
“We are very keen, we are engaged, we are trying. Both sides are trying, but both sides have to be happy,” sources said when asked if the two countries are keen to finalise an interim trade agreement by July 9.
There are always certain areas which are difficult in a trade agreement, they added.
Agriculture and dairy sectors are “difficult and challenging areas for India. And India has not opened up dairy in any of its free trade pacts,” one of the sources said.
When asked if US President Donald Trump’s repeated claims on brokering a pause in Operation Sindoor and the rejection of these claims by Prime Minister Narendra Modi would have any impact on the trade talks, the official said, “India’s interest will always be supreme”.
The US wants duty concessions on certain industrial goods, automobiles—especially electric vehicles, wines, petrochemical products, dairy, and agricultural items like apples, tree nuts, and genetically modified crops.
India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas in the proposed trade pact.
When asked if the July 9 deadline is not extended, the sources said the tariffs would come to the April 2 level (26% in the case of India).
If it is not extended, India may gain in something and may lose some compared to other countries, but the US will also get affected because of the high tariffs, they said.
There is complete uncertainty over the further extension of tariff suspension beyond July 9.
They have fixed a deadline to conclude the first phase by the fall (September-October) this year.
However, dates for the same have not yet been decided.
The US team was here from June 5 to June 11 for the talks. The negotiations will continue both virtually and physically in the days to come.
Edited by Jyoti Narayan
