Talks Over Interim Deal on Reciprocal Tariffs Between India and US Remain Deadlocked

New Delhi: Ahead of the August 1 deadline, the interim deal on reciprocal tariffs between India and the US is unlikely, as talks remain deadlocked over tariff cuts on minimum import price (MIP) or import quotas in sensitive key sectors like agricultural and dairy products. Though the proposed negotiation is likely to resume in the second half of August, the government is still in constant touch with key officials virtually in Washington on this matter. However, New Delhi is exploring all possible options to strike a suitable (interim) deal with the US before the deadline, an official source said on Tuesday.

Meanwhile, the government has informed Parliament that five rounds of talks for the proposed bilateral trade agreement between US and India have been held so far, and further negotiations are in progress. “Both countries are expected to hold the sixth round of negotiations for a bilateral trade deal in the second half of August, and they are aiming for a complete deal in a few months from now, but an interim agreement is not ruled out in the meantime,” the source said.

As wide-spread speculations are rife that an interim deal before August 1 looks difficult, the source said that officials are still engaged in virtual discussion. “We expect a US delegation to visit New Delhi soon to continue negotiations. The tariff issues involved in the discussion are from sensitive sectors such as agriculture, automobiles, digital services, and special chemicals, organisms, materials, equipment, and technologies (SCOMET) trade, among others,” the source said.

The US is also seeking concessions in certain industrial goods, automobiles, wines, petrochemical products, dairy, and other agricultural products, while India is also aiming for import quotas in sensitive sectors like dairy and agriculture as part of the deal. “India also wants up to 7 per cent cut in basic customs duty for its exports of labour-intensive products like leather. Besides, goods and digital services are likely to be a part of discussion in the interim trade deal with the US,” the source added.

In an interview to a Delhi-based agency, Deloitte South Asia CEO Romal Shetty said that trade wars are not here to stay, predicting that the current uncertainty could ease over the next few months. “I believe India and the US are closer than they have been in many years, with the two sides sharing more common ground than ever before. India is in a more advantageous position than many other nations, owing to its strengthened relationships with the United States and its strategic geopolitical standing,” Shetty said.

However, Minister of State for Commerce and Industry Jitin Prasada informed the House in a written reply to the Lok Sabha that negotiations for the proposed bilateral trade agreement between India and the US were launched in March 2025, and five rounds of talks have been held, the last being from July 14-18, 2025, at Washington. “Similarly, twelve rounds of negotiations have been held so far between India and the European Union (EU) for the proposed free trade agreement. The last round was held from 7-11 July in Brussels,” Prasada said.