India-US trade talks hit roadblock over tariffs ahead of Trump’s July 9 deadline

Commerce talks between India and the US have hit a stalemate over disagreements on import duties for auto elements, metal and agricultural items, dashing hopes of finalising a deal forward of President Donald Trump’s July 9 deadline to impose reciprocal tariffs.

The impasse marks a pointy shift from current optimism. Trump had claimed India was keen to pursue a “no tariffs” settlement and negotiators on each side had steered India may very well be among the many first international locations to strike a deal below the brand new US tariff regime.

“India is in search of a rollback of the proposed 26% reciprocal tariff set to take impact on July 9, together with aid from present US tariffs on metal and auto elements. However American negotiators are demanding deeper tariff cuts from India on farm items similar to soybeans and corn, in addition to cars and alcoholic drinks, Reuters quoted Indian officers as saying.

”The US facet first desires India to decide to deeper import tariff cuts on farm items like soybeans and corn, vehicles and alcoholic drinks together with easing of non-tariff limitations,” resulting in disagreement between the 2 sides, one of many sources stated.

The sources spoke on situation of anonymity, citing the confidentiality of the continued discussions.

India’s commerce ministry, the US Embassy in New Delhi and the US Commerce Consultant Workplace didn’t instantly reply to requests for remark.

An Indian delegation is anticipated to journey to Washington earlier than the deadline, though discussions might now deal with a broader settlement somewhat than a rushed interim deal, a second Indian authorities supply stated.

Prime Minister Narendra Modi is making an attempt to place India as a key U.S. companion, in search of to draw U.S. companies like Apple, diversifying provide chains away from China.

However commerce talks have struggled to make headway.

”We’re eager, however not determined to signal a deal earlier than the July 9 deadline,” the primary supply stated, including that India has provided tariff cuts on almonds, pistachios, walnuts, and was keen to increase preferential remedy for American imports in sectors like power, autos and defence.

”There hasn’t been a lot progress regardless of a number of rounds of talks,” the second supply stated.

Nonetheless, the sources didn’t rule out a last-minute breakthrough if Modi and Trump select to intervene immediately.

LONG TERM PARTNERSHIP

Regardless of the deadlock, Indian officers stress long-term dedication to the U.S. as a trusted financial companion, whereas sustaining coverage independence.

Modi and Trump agreed in February to conclude the primary section of a bilateral commerce settlement by autumn 2025 and to increase commerce to $500 billion by 2030, from about $191 billion in 2024.

India can be advancing talks with the European Union for a free commerce pact later this 12 months, and just lately concluded talks for a FTA with the UK – strikes geared toward hedging towards potential US coverage shifts below Trump.

”The ball is now within the US court docket. India will not be for any win-lose commerce partnership,” stated Ram Singh, head of the Indian Institute of International Commerce, a authorities funded think-tank.

Even in a worst-case state of affairs, a 3rd official stated, India may soak up the influence of reciprocal tariffs, citing its continued tariff benefit over rivals like Vietnam and China.

India’s exports to the US rose to $17.25 billion in April-Could, up from $14.17 billion a 12 months earlier, suggesting the US tariff hikes averaging 10% in early April had a restricted influence.

With inputs from businesses