India Eyes Interim Trade Deals with US and EU Ahead of July Deadline

Negotiations are ongoing between India and the United States regarding tariffs across various sectors. India is making a strong case for zero tariffs on its labor-intensive sectors. In April, the US imposed a 26% reciprocal tariff on Indian goods, which has been deferred for 90 days.

There is strong hope that an interim trade agreement with the US will be finalized before July 8. Following that, between July and August, India may also sign a similar interim agreement with the European Union (EU).

Currently, Indian goods face a 10% tariff in the US. India aims to eliminate this tariff for its employment-generating sectors to enhance their competitiveness in the US market. In exchange, India may offer tariff relaxations on several US products. However, for agricultural imports, India is firm on allowing only non-genetically modified (non-GM) products.

Sensitive items like dairy products are unlikely to be part of the interim agreement. Recently, India and the United Kingdom concluded negotiations on a free trade agreement (FTA), and both are expected to sign it within the next two to three months. A similar FTA with Oman is also on the horizon.