India, US push to finalise interim tariff deal as Trump's deadline nears

New Delhi - Indian and US are holding high-level talks this week, aiming to finalise tariff cuts in sectors such as farm and automobiles as part of an interim deal, two government sources said, with an announcement likely later this month.

A US delegation led by senior officials from the Office of the United States Trade Representative (USTR) began closed-door, two-day discussions in New Delhi on Thursday with Indian trade officials headed by chief negotiator Rajesh Agrawal, the sources said.

"During the current round of talks, negotiators are discussing tariff cuts on specific sectors including agriculture and autos, and proposed benefits for Indian companies," one Indian government source, said.

The deal may be formally announced by month end, before the self-imposed deadline of July 9 by President Trump, but a statement is expected once meetings wrap up, possibly by Sunday, a second official said.

Trade Minister Piyush Goyal, currently in Italy, may return to meet the delegation, the official added.

The officials said spoke on the condition of anonymity due to the sensitivity of the discussions.

Indian trade ministry didn't immediately respond to requests for comments.

US Commerce Secretary Howard Lutnick said in Washington on Monday that trade negotiations were progressing and a deal could be finalised soon.

India and the U.S. agreed in February to work on a phased deal, aiming to lift bilateral trade to $500 billion by 2030.

Officials said, India, buoyed by recent trade pact with the UK, and EU talks, is resisting U.S. demands to open its farm and dairy markets, citing potential rural backlash.

"We are ready to offer a better deal than the UK pact, with average tariffs down to 10%, matching the U.S. base rate, and near-zero duties with quotas in exchange for market access and supply chain linkages," a third official said.

Washington has flagged India's average farm tariff of 39%, with some duties reaching 45-50%. It is also pushing India to allow corn imports for ethanol production.

Bilateral trade with the U.S., India's largest trading partner, rose to $129 billion in 2024, with India posting a $45.7 billion surplus.