India and the United States can announce an interim trade agreement before July 8, in which India will demand a complete discount from 26 percent additional tariffs imposed on its household items.
Giving information, a government official said that India and America can announce an interim trade agreement before July 8. On April 2, the US imposed a 26 percent additional recipe on Indian goods, but was suspended by 90 days by 90 days. However, the baseline tariff of 10 percent imposed by the US is still applicable.
The government official said that India can fix some quota or minimum import price (MIP) for the protection of its sensitive areas such as agriculture and dairy.
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The official said, ‘The conversation is moving positively. Before July 8, we are considering finalizing an interim agreement before the first phase. It will also include some service sector like goods, non-tariff barriers, digital. We are trying not to have 26 percent additional fee and 10 percent baseline tariff for India.
He also said that India is seeking concessions for labor-dominated areas like textile, gems and jewelery, leather items, apparel, plastic, chemicals, shrimp, oilseeds, chemicals, grapes and bananas.
Currently the Trump administration requires approval from the US Congress to bring Tariff below MFN (most preferred nation) rates. But the administration has the right to remove reciperook tariffs imposed on many countries including India.
Both countries committed to increasing trade agreement
India may consider some commitments from the United States on fee concessions for its labor-dominated region in the first phase of the proposed bilateral trade agreement (BTA). The two countries have targeted to finalize the first phase of the agreement by September-October this year, so that bilateral trade can be doubled by $ 500 billion by 2030. The discussion of the chief negotiaters between the officials of New Delhi and Washington will continue till 22 May, so that the 90 -day fee can be availed for the duration of suspension.
Officials of New Delhi and Washington are trying to take advantage of the 90-day tariff break period to carry forward the talks. The US has postponed the additional 26 percent tariff on India till 9 July. It was announced by the US on 2 April to bridge the rising trade deficit.
America wants concession in these areas
On the other hand, America wants fee concession in areas such as some industrial goods, automobiles (especially electric vehicles), wine, petrochemical products, dairy, agricultural products like apples, tree kernels and GM (geneticly modified) crops. While the import of GM crops from the US is still closed due to regulatory criteria in India, New Delhi is open for import of non-GM products such as Alpha-Alpha grass (a type of animal feed).
On many occasions, the US has expressed concern over some non-tariff obstacles faced by American goods in Indian markets.
Asked if there would be another round of talks on the proposed agreement between the two countries, the official said, “We are trying to finalize things as soon as possible.”
The US remained India’s largest trading partner in the fourth consecutive year 2024-25, which would be US $ 131.84 billion. America’s share in India’s total goods exports is around 18 percent, 6.22 percent in imports and 10.73 percent in the country’s total goods trade.
India’s trade surplus (difference between import and export) in terms of goods in 2024–25 with the US was US $ 41.18 billion. It was US $ 35.32 billion in 2023-24, US $ 27.7 billion in 2022-23, US $ 32.85 billion in 2021-22 and US $ 22.73 billion in 2020-21. America has expressed concern over this growing trade deficit.