Interim trade pact with US in sight; agri, auto sectors sticking points

Indian negotiators are optimistic about finalising an interim trade agreement with the US well before President Donald Trump’s July 9 deadline, with officials confident of protecting key domestic sectors like agriculture and dairy — areas where the US has been pushing for greater access.

The Indian team, led by chief negotiator Rajesh Agarwal, returned from Washington today, with sources saying that a deal was likely to be sealed before July 9, when Trump’s 90-day cooling-off period on 26 per cent reciprocal tariffs expires.

“Certain issues in agriculture and auto sectors remain unresolved, but discussions will continue,” an official said. While India has ruled out tariff cuts on genetically modified US crops like corn, soybean, rice, and wheat, it may consider concessions on items such as walnuts and certain fruits, officials have said.

The US has been pressing for lower tariffs on dairy products, apples and GM crops, but India has so far resisted opening its dairy sector in any trade pact, given its political and economic sensitivity.

Meanwhile, India has notified the World Trade Organisation (WTO) of its plan to impose retaliatory tariffs on select US goods in response to America’s 25 per cent duty on Indian auto parts, imposed under safeguard measures. A WTO document stated that India’s proposed countermeasures would involve higher tariffs on specific US products.

The US had imposed the additional tariffs on Indian passenger vehicles, light trucks and certain auto parts in March, with the measures taking effect from May 3, 2025, for an indefinite period. India has also reserved the right to retaliate against US steel and aluminum tariffs, signalling a cautious yet firm stance in ongoing trade negotiations.