The likelihood of reaching a temporary trade agreement between India and the United States before Washington’s August 1 deadline on tariffs has diminished. Two Indian government sources reported that negotiations are stalled over tariff reductions, primarily on agricultural and dairy products.
US President Donald Trump threatened in April to impose a 26% tariff on imports from India, but suspended the implementation to allow for negotiations.
This suspension ends on August 1, but India, contrary to expectations, has not yet received an official tariff letter.India’s trade delegation, led by chief negotiator Rajesh Agrawal, returned from its fifth meeting in Washington without reaching an agreement.
An Indian government source said, “A provisional agreement before August 1 seems difficult, but virtual negotiations are ongoing.” Furthermore, a US delegation is expected to visit New Delhi soon to continue negotiations.
The negotiations are stalled because India is unwilling to open its agricultural and dairy sectors, while Washington resists India’s demands for lower tariffs on steel, aluminum, and automobiles. Another Indian government source stated that they are working on whether these issues can be postponed to a later stage following a temporary agreement.General of the Confederation of Indian Exporters Director Ajay Sahai warned that sectors such as jewelry could be severely impacted if 26% tariffs were implemented.
“There could be a short-term impact on sectors, but both countries aim to sign the agreement in time,” he said.
US Treasury Secretary Scott Bessent told CNBC that the Trump administration is focused on the quality of trade agreements rather than the timing.
When asked whether a country would extend the deadline in negotiations, Bessent said it depended on Trump. He said that.
Indian officials hope to sign a broader trade agreement in September or October, in line with the agreement reached between Prime Minister Narendra Modi and Trump in February.
A third Indian government source said, “Five rounds of talks have been held and another US delegation is expected to arrive. Therefore, we are optimistic about the trade agreement being finalized.”
The sources requested anonymity, stating that the negotiations were not public.
Indian Ministry of Commerce The U.S. Trade Representative’s Office did not immediately respond to requests for comment via email.
