Washington, D.C. – A limited trade agreement between India and the United States is expected to be finalized within the next 48 hours, according to officials familiar with the ongoing negotiations. Indian trade representatives, who extended their stay in Washington last week, are working to resolve final differences before a July 9 deadline, when suspended U.S. tariffs are set to be reinstated.
The discussions have narrowed in focus, with both sides emphasizing reciprocal tariff reductions. However, significant friction remains over the U.S. request for greater access to India’s agricultural and dairy sectors, as well as its push to allow genetically modified crops. These areas are considered politically sensitive in India due to concerns over rural livelihoods, food security, and the protection of small-scale farmers. Sources confirm that agriculture and dairy are likely to remain outside the scope of the current agreement.
India, for its part, is seeking meaningful tariff concessions on its labour-intensive export sectors, such as footwear, garments, and leather goods, which are critical to job creation. Indian negotiators have signaled that a deal without tangible relief on these sectors would be insufficient, warning that broader goals such as doubling bilateral trade to $500 billion by 2030 cannot be met without improved market access and reduced duties on key exports.
Federation of Indian Export Organisations (FIEO) CEO Ajay Sahai stated that Indian exports to the U.S. could potentially double within the next three years if the interim deal is finalized with substantial tariff relief.
U.S. President Donald Trump, speaking earlier this week, reaffirmed that a trade deal with India is forthcoming and emphasized that it would reduce tariffs and increase competitiveness for American businesses. He expressed confidence that India would allow greater access to its market under the new agreement, paving the way for mutual benefit.
Negotiators are working against the clock to finalize terms before the pause on the 26 percent reciprocal tariffs expires. These punitive duties, first imposed during Trump’s first term, were temporarily suspended for 90 days but are set to automatically resume unless a deal is reached. While Indian officials acknowledge that a lapse in talks would trigger the return of the tariff structure, some sources suggest the economic impact may be limited, as India’s competitors face higher duty thresholds.
India’s firm stance on excluding agriculture and dairy from the agreement underscores the political sensitivity of its farming sector, which is composed predominantly of smallholders. India has also historically refrained from opening its dairy industry in previous trade agreements and is showing no indication of changing that precedent under current U.S. pressure.
The outcome of this deal, whether finalized or deferred, will shape the next phase of India-U.S. trade relations and define their approach to balancing domestic interests with global economic engagement.