India is actively seeking a full exemption from the 26 percent additional reciprocal tariff imposed by the United States on April 2, aiming to finalize an interim trade deal before the July 9 deadline, according to senior government officials.
While the U.S. temporarily suspended the additional duties for 90 days, India is urging Washington to not only extend the exemption but also remove the existing 10 percent baseline tariff. The two sides are pushing to complete the first phase of a broader bilateral trade agreement (BTA) by early July, which will include tariff concessions, reduction of non-tariff barriers, and cooperation in select service sectors such as digital trade.
India’s Commerce and Industry Minister Piyush Goyal traveled to Washington earlier this week to advance negotiations. He held high-level talks with U.S. Trade Representative Jamieson Greer and U.S. Commerce Secretary Howard Lutnick. Both sides have agreed to continue discussions through May 22, seeking to leverage the 90-day tariff pause to reach a breakthrough.
To protect sensitive sectors like agriculture and dairy, India is considering mechanisms such as import quotas or minimum import prices. Simultaneously, it is pressing for U.S. concessions on goods from labour-intensive sectors including textiles, leather, gems and jewellery, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas.
The U.S., for its part, is pushing for lower Indian tariffs on electric vehicles, wines, industrial goods, petrochemicals, and agricultural products like apples, tree nuts, and genetically modified crops. While India has regulatory blocks on GM crop imports, officials signaled openness to importing non-GM alternatives like alfalfa hay used for cattle feed.
The Biden administration—though requiring Congressional approval to drop tariffs below MFN (most-favoured nation) rates—retains authority to eliminate reciprocal tariffs for specific countries, including India.
The goal for both nations is to conclude the first tranche of the agreement by the fall and set a course for doubling bilateral trade to USD 500 billion by 2030. In 2024–25, the U.S. remained India’s top trading partner for the fourth year in a row, with total trade amounting to USD 131.84 billion. India maintained a trade surplus of over USD 41 billion with the U.S. during that period—a figure Washington has repeatedly flagged as a concern.
Officials remain hopeful of reaching a comprehensive interim deal that addresses immediate tariff pressures while paving the way for deeper economic cooperation.
