India-US Trade Talks: Interim Pact Discussions Likely in Coming Weeks

New Delhi, May 26 (PTI) A team of US officials is expected to visit India in the coming weeks for the next round of discussions on the proposed interim trade agreement between the two countries, sources said.

The visit gains importance as India and the US are likely to agree on an interim trade agreement before July 9, with New Delhi pushing for full exemption from the 26 per cent reciprocal tariff on domestic goods.

"The US team is expected in India for trade talks. Negotiations are moving at a faster pace," one of the sources said.

India's chief negotiator, Special Secretary in the Department of Commerce Rajesh Agrawal, concluded his four-day visit to Washington last week. He held talks with his US counterpart on the proposed agreement.

Commerce and Industry Minister Piyush Goyal was also in Washington last week to give an impetus to trade talks. He met with US Commerce Secretary Howard Lutnick twice during his visit.

The US on April 2 imposed an additional 26 per cent reciprocal tariff on Indian goods but suspended it for 90 days till July 9, later. However, Indian goods still attract the 10 per cent baseline tariff imposed by America.

At present, the Trump administration requires approval from the US Congress to bring tariffs below the MFN (most favoured nation) rates. But the administration has the authority to remove the reciprocal tariffs imposed on a number of countries, including India.

Both countries have fixed a deadline to conclude the first phase of the proposed bilateral trade agreement pact by the fall (September-October) of this year. According to sources, there is a possibility that both sides agree on an interim trade deal before the first tranche.

The US remained India's largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at USD 131.84 billion. The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in the country's total merchandise trade.

With America, India had a trade surplus (the difference between imports and exports) of USD 41.18 billion in goods in 2024-25. It was USD 35.32 billion in 2023-24, USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22 and USD 22.73 billion in 2020-21. The US has raised concerns over this widening trade deficit.

The two trading partners look to more than double bilateral trade to USD 500 billion by 2030.