India is racing against time to finalize a phased trade agreement with the United States, hoping to soften the blow of President Donald Trump’s looming reciprocal tariffs. The goal? Get the first piece of the deal done before July hits—and the new duties hit even harder.
Delhi Eyes Quick Fix Before Tariff Clock Runs Out
There’s no sugarcoating it. July could be brutal for Indian exporters if things don’t move fast.
Sources in India’s Commerce Ministry say talks with the US are progressing, and the target is clear: clinch an interim agreement by the end of June. That agreement, while narrow in scope, would offer some breathing room by giving US access to a few key Indian sectors—particularly industrial goods and farm produce.
Behind closed doors, negotiators are focused on making the first stage quick, palatable, and politically digestible.
One official told Bloomberg that this isn’t meant to be a sweeping overhaul. “It’s damage control,” they said. “We’re trying to buy time.”
India’s industrial exporters—auto parts, textiles, and chemicals, to name a few—have grown nervous over Trump’s new push for “reciprocal trade.” Without a deal, these sectors could get slapped with steep new tariffs.
What Might Make It Into Round One of the Deal
While details remain under wraps, the first step of the deal is expected to focus on market access and cutting red tape. Several officials have hinted at a shortlist of sectors being considered. Nothing’s locked in yet, but the whispers are telling.
• Industrial goods—especially machinery, electronics components, and auto parts
• Select agricultural products like mangoes, grapes, and seafood
• A few tweaks to quality control protocols that currently slow Indian exports to the US
India also wants to revisit restrictions around processed food exports, especially those stuck due to US sanitary standards.
But it’s not a one-way street. In exchange, the US may press for improved access to Indian markets for almonds, apples, and dairy—always a tricky area, especially with farmer unions watching closely.
One source in Delhi said, “We’re not looking at big wins here. Just small steps that keep the doors open.”
Goyal’s Mission in DC: Keep Talks From Stalling
Commerce Minister Piyush Goyal’s current visit to Washington is being watched closely. It’s not just diplomatic theatre—it’s a make-or-break round.
On the schedule: Meetings with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick. Goyal is expected to push hard for a handshake deal, or at the very least, a framework that can be announced soon.
Back in India, pressure is mounting from industry groups who fear losing access to their biggest export market. The Federation of Indian Export Organisations (FIEO) has already warned about cascading effects if tariffs go up.
A former diplomat familiar with US-India trade issues said, “This trip is where things either move or stall. It’s that simple.”
The tone in Washington will be key. Trump’s administration has shown little patience for lengthy negotiations. Officials in DC want speed, clarity, and guarantees. That’s not always easy to offer—especially from a democracy juggling domestic politics.
The Bigger Middle Chapter: 19 Issues, 1 Giant Step
If the first deal is about avoiding pain, the second stage is about setting the tone for real collaboration.
Planned between September and November, the second agreement would likely tackle a much broader set of issues—19, to be exact—that both nations began hashing out in April.
Unlike the interim deal, this one could stretch into deeper territory:
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Intellectual property protections
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Labor and environmental clauses
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Rules on government procurement
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Customs cooperation and digital trade
Here’s a snapshot of how both countries have previously aligned or clashed on a few of these:
| Issue Area | India’s Position | US Position |
|---|---|---|
| E-commerce | Data localization, privacy control | Open data flows, minimal localization |
| IP protections | Flexible licensing, affordable access | Stronger enforcement, pharma patent push |
| Labor clauses | No legal mandate, prefer voluntary norms | Want binding labor commitments |
| Agriculture | Defensive, high sensitivity | Market opening for dairy, pulses |
It’s a complicated patchwork, no doubt. But the timing isn’t accidental.
Trump might be heading to India around the same time for the Quad summit, and both governments would love to showcase something tangible—if not flashy.
Third and Final Phase Faces the Hardest Test: Congress
And then there’s the last stretch. The full, final trade agreement. Sounds great on paper—comprehensive, long-term, binding. But there’s a catch: it needs US Congress approval.
And that’s where the trouble starts.
With an election year heating up and partisan divides in full swing, it’s not exactly the best time to float a foreign trade pact through Capitol Hill. Indian negotiators know this. So do their US counterparts.
One Indian trade analyst put it bluntly: “Getting through Congress in 2025 is like walking barefoot on hot coal. You don’t do it unless you absolutely have to.”
The final deal would likely include:
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Long-term investment protections
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Dispute settlement mechanisms
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Services trade facilitation
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Deeper coordination on standards and compliance
But before any of that gets inked, expect a year’s worth of political wrangling, sectoral lobbying, and legal nitpicking. And if Trump’s administration changes course—or changes altogether—it could all go back to square one.
