U.S.–India Trade Talks Intensify as Tariff Deadline Nears; Deal Expected Within 48 Hours

India and the U.S. are close to finalising an interim trade deal, with talks expected to conclude within 48 hours ahead of the July 9 tariff deadline. If no agreement is reached, India's reciprocal tariff rate could rise from 10% to 27%. Washington is pushing for greater access to India's agricultural and dairy markets, including genetically modified crops, but New Delhi has resisted, citing risks to farmers' livelihoods. India is seeking tariff concessions on labour-intensive exports, such as garments and footwear. Both sides have shown a willingness to resolve the conflict, with officials hopeful of a successful conclusion very soon.

The United States and India are making a last-minute push to seal an interim trade agreement as the July 9 deadline for increased U.S. tariffs approaches. Despite significant progress, key differences between agricultural and dairy products continue to delay the much-anticipated deal, according to reports by Reuters and NDTV.

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Sources reveal that Indian and U.S. trade negotiators are working around the clock in Washington to finalise the agreement. The 90-day tariff pause, granted by U.S. President Donald Trump in April, is set to expire on July 9. If no deal is reached, India's current reduced tariff rate of 10% could jump to 27%, dealing a significant blow to Indian exports.

Dairy and Agricultural Stalemate Continues
While both nations have shown a willingness to make certain concessions, India's government has remained firm on protecting its farmers and rural economy. Washington has demanded that India open its market to genetically modified crops, including corn, soybeans, rice, and wheat. However, New Delhi has rejected these demands, citing concerns over food safety and the livelihood of millions of farmers.

Prime Minister Narendra Modi's government has also resisted U.S. pressure to fully open the Indian dairy sector, describing it as the economic backbone for rural India. "The government doesn't want to be seen as surrendering the interests of farmers — a strong political group in the country," one source familiar with the negotiations told Reuters.

Potential Areas of Agreement
Despite the sticking points, negotiators have made progress on other fronts. India is reportedly open to reducing tariffs on walnuts, cranberries, medical devices, automobiles, and energy products from the U.S. In return, New Delhi is pushing for lower tariffs on its labour-intensive exports, such as garments, footwear, and leather, which are vital sectors for employment in India.

Strategic Importance Beyond Trade
The interim deal is seen as more than just an economic arrangement. Both nations view it as a strategic step in strengthening ties amid growing global uncertainties. U.S. President Trump also expressed optimism, stating aboard Air Force One that he could strike a deal to support U.S. companies' access to India's vast 1.4 billion consumer market.

Conclusion
With only days left before the tariff deadline expires, officials on both sides are racing to bridge gaps and announce a deal. While the outcome remains uncertain, both Washington and New Delhi recognise the high stakes, both economically and politically, for both nations. A successful agreement would help avoid higher tariffs, boost trade relations, and demonstrate the ability of the two nations to overcome longstanding differences through negotiation.