With a fresh window for negotiations before the US ‘reciprocal tariffs’ come into effect on August 1, Indian negotiators led by Rajesh Agrawal, Special Secretary in the Ministry of Commerce and Industry, are likely to leave for Washington next week to iron out pending issues like agriculture and auto sector tariffs that are holding back the interim trade agreement on goods, a government official told The Indian Express.
The Indian team had returned from the last round of negotiations on July 4, days before the reciprocal tariff pause was earlier set to run out on July 9.
Last week, the US said the new tariff rates would come into effect on August 1, and there would be “no extension”. It said that if the August 1 deadline was not adhered to, countries would go back to the April 2 tariff levels – the US had announced 26 per cent reciprocal tariffs on India then.
“A proposal for another round of trade negotiations with the US has been sent to the top brass of the government. Negotiators are confident that the differences with the US team on agriculture, which have been holding back the agreement, will be resolved. There is already broad consensus on the subject between the two teams and the remaining issues will also be settled,” an official said.
The Ministry of Commerce and Industry did not respond to queries on the issue.
The proposal for a fresh round of talks comes amid heightened uncertainty as US President Donald Trump has started announcing fresh tariff rates. While he has said that a deal with India is “close”, Trump has announced steep tariffs ranging from 25 per cent to 50 per cent on nearly 20 countries, including Brazil, South Korea, Japan, Malaysia, Indonesia and South Africa.
At a Confederation of Indian Industry (CII) event on Thursday, Agrawal said India is “trying to negotiate and finalise a deal with the United States of America” and that New Delhi has embarked on a journey of free trade agreements (FTAs) involving 14 trade agreements with 26 countries.
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“We have just concluded a deal with the UK. We are in the advanced stage of our negotiations with the EU. We are trying to negotiate and finalise a deal with the US. We are reviewing the ASEAN trade deal. We are now even entering Latin America and trying to have deals with Chile and Peru. We have done one with Australia and the UAE. Negotiations with New Zealand have started. So the idea is that we are now integrating in a big way with the major trading partners across the world and major economies,” Agrawal said.
The likelihood of India avoiding US reciprocal tariffs has gained currency, as Trump on Monday said the US is close to signing a trade deal with India. While announcing the new rates, he warned that rerouting foreign goods or retaliating would attract even higher US tariffs.
Indian negotiators are understood to have offered substantial market access to US products in most sectors, excluding sensitive areas such as dairy and agriculture. The US, in turn, is expected to offer lower tariffs on labour-intensive sectors such as textiles and footwear, and withhold future tariffs on India.
Notably, the interim trade deal with the US is likely to feature market access in goods alone. An official said this would particularly include agriculture and automobiles, where Indian and US negotiators are driving a hard bargain.
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A government official had said last week that “all possibilities are open” and the trade deal will be signed when it is mutually beneficial and not under “deadline pressure”. “India is not going to face Vietnam-type tariffs as India is not involved in rerouting third-country goods. Labour and services are not under discussion,” the official said.
The official said the US is not willing to give concessions on steel to any country, and that India has imposed safeguard duties to protect its domestic industry. India is focusing on labour-intensive goods such as textiles, apparel and footwear, where it has a competitive edge over other countries.
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