India and the United States are advancing talks on a trade agreement, with both countries looking to resolve tariff issues and improve market access before the July 9 deadline. Keywords such as India-US trade deal, reciprocal tariff, preferential access, and market access underline the significance of this development for bilateral relations.
India and the United States are making rapid progress towards a trade deal as the 90-day pause on reciprocal tariffs nears its July 9 expiry. American Secretary of Commerce Howard Lutnick expressed optimism about reaching an agreement soon, stating it could be finalised in the “not too distant future” because “we’ve found a place that really works for both countries”.
American Secretary of Commerce Howard Lutnick has said a trade deal between India and the United States (US) could be finalised in the “not too distant future” because “we’ve found a place that really works for both countries”. He signalled that the agreement might be concluded before the end of a 90-day pause on American reciprocal tariffs, which expires on July 9.
India is pushing for an early tranche of the trade deal before the July 9 deadline to avoid a potential 26% reciprocal tariff. Lutnick, speaking at an event hosted by the US-India Strategic Partnership Forum (USISPF) in Washington DC, acknowledged the urgency of concluding negotiations quickly.
“Those who come in, July 4th to July 9th, there’s just going to be a pile,” Lutnick said. “But those who are earlier — and India is trying hard to be one of the earlier countries, which I appreciate... These kinds of deals used to take two or three years, and we’re trying to get them done in a month, which is just not the ordinary DNA of trading relationships between countries.”
While both nations are aiming to sign a comprehensive deal by autumn, India is seeking quicker action to protect its export sectors. A US trade delegation is also expected to visit India soon to continue high-level discussions.
At the heart of the ongoing talks is the exchange of market access. The United States wants more access to Indian markets, while India is negotiating preferential entry into select American sectors.
Lutnick said the US was seeking greater access to Indian markets and, in return, was prepared to offer India preferential access in select key sectors.
“We would like our businesses to have reasonable access to the markets of India. Now, it’s not going to be everything, and it’s not going to be everywhere, but we want to have the trade deficit reduced. In exchange for that, what India is going to want is… certain key markets that they’re going to want to make sure that they have special access to the American marketplace. And so that’s the trade-off,” he said.
India’s strategy is to use this opportunity to strengthen its export potential while addressing existing trade imbalances.
Read More: India Plans Retaliation After US Dismisses WTO Tariff Notice!
Agriculture has emerged as a sensitive area in these negotiations, particularly for the United States. Lutnick noted that American farmers and ranchers wield considerable political influence, making this sector politically complex.
On market access in agriculture — a key US demand — Lutnick emphasised the need for political resolve on both sides.
“The US understands (political influence of farmers and ranchers. These are the kind of people who have lots of political voices ,and we understand that,” he said. “So what we try to do is find the path that is acceptable politically at home and for us as well. We’ll find that path together. It’s just a smart way of doing it. We have that same political will here.”
This signals that any final agreement on agricultural trade terms will need to carefully navigate domestic political considerations in both countries.
Lutnick credited the strong personal rapport between US President Donald Trump and Indian Prime Minister Narendra Modi as a key enabler of smoother negotiations.
The Secretary of Commerce said the strong and positive relationship between US President Donald Trump and Prime Minister Narendra Modi “gives an easy path” to him to do trade negotiations because both sides start from a “very positive place”.
This political goodwill has created an environment conducive to faster resolution and more flexible approaches on both sides.
Despite growing cooperation, Lutnick echoed President Trump’s view that India maintains a protectionist stance on tariffs.
However, echoing Trump’s views, Lutnick noted that India remained “very protectionist” in its approach to tariffs. “If you ask them why, the answer is, ‘I don't know why, it just is.’ So the idea is to bring them down to a level that is reasonable and appropriate so we can be great trading partners with each other. I think (this) is absolutely on the table.”
Reducing these tariff levels to more acceptable benchmarks is central to aligning trade objectives and enhancing competitiveness.
The US is restructuring its global supply chains, aiming to bring advanced manufacturing back to its domestic base. However, Lutnick stated that India could benefit from this realignment by absorbing production in certain product categories.
While the US intends to bring advanced manufacturing back home, Lutnick said there were many product categories that could be shifted to India. “We’re going to have a trade deal that says these kinds of industries would be great for India to produce… Some will need to be reshored to America, but they’ll be replaced with incredible opportunities for India,” he said.
This opens new doors for Indian industries looking to integrate into high-value global production networks.
One of the most notable outcomes of the agreement could be India’s preferential status in selected sectors, enabling better tariff treatment than other nations.
“You create the sort of trade deal that puts India in a unique position. In certain industries, it will have a better tariff relationship than most other countries in the world, which means India will be the beneficiary of those kinds of products,” he added.
Such a position would significantly boost India’s global trade standing and attract more international interest in its export capabilities.
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Published on: Jun 4, 2025, 1:48 PM IST
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