India optimistic about trade deal with US as tariff deadline looms

India is optimistic about finalizing a trade agreement with the United States before the 9 July deadline for the suspension of reciprocal tariffs, Foreign Minister S. Jaishankar has stated. The announcement comes amid high-stakes negotiations aimed at resolving trade tensions between the two nations.

Progress in trade talks

In an interview with French newspaper Le Figaro, Jaishankar highlighted that trade negotiations between India and the US had already commenced before the Trump administration's announcement of steep tariffs on 2 April, which included duties of up to 27% on Indian exports.

“Prime Minister Narendra Modi met with President Donald Trump in February to discuss opening access to our respective markets further,” Jaishankar said. “We are hopeful of reaching an agreement before the tariff suspension ends on 9 July.”

On the same day, a US delegation engaged in closed-door talks with officials from India’s trade ministry in Delhi. According to a source quoted by Reuters, these discussions were “productive” and marked significant progress toward crafting a “mutually beneficial and balanced agreement,” with some preliminary agreements already taking shape.

Trade imbalances and concessions

The US remains one of India's largest trading partners, with bilateral trade totaling $190 billion. However, a $45 billion trade deficit in favor of India has been a sticking point for Washington, with Trump seeking to reduce the gap.

India has already reduced tariffs on specific US goods such as Bourbon whiskey and motorcycles, but it remains firm on protecting politically sensitive sectors like agriculture.

Both leaders have set an ambitious target of increasing bilateral trade to $500 billion. However, Delhi appears cautious about making concessions that could impact domestic industries.

Optimism amid challenges

US Commerce Secretary Howard Lutnick expressed confidence last week, stating he was “very optimistic” about the prospects of a deal, which he believes could materialize in the “not too distant future.”

Meanwhile, Trump’s earlier claim that India had agreed to eliminate all tariffs on US imports was swiftly denied by Indian officials. Jaishankar reiterated that “nothing is decided till everything is,” emphasizing the importance of balance and mutual benefit in any agreement.

Shifting US foreign policy

Discussing broader US foreign policy under Trump, Jaishankar remarked to Le Figaro that the US approach reflects a focus on immediate self-interest. “Frankly, I will do the same with them,” he said, underlining India’s intent to prioritize its own national interests in the negotiations.

As the 9 July deadline approaches, both sides are under pressure to finalize a deal that addresses trade imbalances while fostering stronger economic ties between the two nations.