India-US Trade Deal Likely To Be Finalised Within A Week: Sources

India and the United States are poised to finalise a limited trade deal within the coming week, as both sides race against a July 9 deadline when the US is set to end a 90-day pause on new tariffs for most nations.
This urgency is driven by US President Donald Trump’s announcement that he does not intend to extend the tariff suspension, increasing pressure on negotiators to reach an agreement that would shield both countries from potential tariff escalations.
Agricultural Protections And Concessions: India has emphasised that it will safeguard its core agricultural interests, particularly for rice, fruits, millets, and wheat. While the US seeks greater access to India’s agricultural market, India is expected to offer only limited concessions, potentially through modest reductions in duties or tariff-rate quotas on select American products such as ethanol, almonds, apples, avocados, wine, and spirits.
Automotive Sector: The deal is expected to include mutual benefits for the automobile sector. Select American vehicles, including Tesla, will receive incentives and improved market access in India. In return, Indian auto components are set to benefit from tariff relief in the US market.
Tariff Relief And Market Access: The agreement is likely to require India to lower Most Favoured Nation (MFN) duties on various industrial products, a longstanding US demand. Both sides are also negotiating market access for parts and spares, with reciprocal benefits.
Tariff Withdrawal: India is seeking a clear US commitment to withdraw all existing and potential retaliatory tariffs, including a 26% reciprocal tariff (comprising a 10% baseline and an additional 16% country-specific levy set to activate July 9). This remains one of the final sticking points, alongside US demands for greater access to India’s sensitive agricultural sectors.
Negotiators have largely resolved the technical details, but the final agreement awaits political approval at the highest levels in both countries. Both governments are under pressure to announce a breakthrough soon, with the current deal expected to cover only a portion of total bilateral trade—a so-called “mini-deal” or interim arrangement. A more comprehensive trade pact is anticipated by October 2025.
This trade deal is seen as a critical step in strengthening economic ties between India and the US, with both sides aiming to expand annual bilateral trade from $191 billion to $500 billion by 2030. The agreement is also expected to set a precedent for future negotiations, offering preferential access and regulatory alignment in sectors such as digital trade, medical devices, and services.
The India-US trade deal is on track to be finalised within a week, featuring mutual concessions in agriculture and automobiles, with both countries seeking to avoid new tariffs and lay the groundwork for a broader economic partnership.
Agencies
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