Ball In Washington’s Court: New Delhi Draws Red Line As Trump’s Tariff Deadline Looms

New Delhi: The India-US trade negotiations have reached a critical juncture as the two countries work towards finalising an interim trade pact ahead of US President Donald Trump’s July 9 tariff deadline. The trade experts stated that with India having drawn its red lines on key sectors such as agriculture and dairy, the ball is now firmly in Washington’s court to seal the deal. The reports indicated that if issues are resolved, an interim trade agreement could be announced before the deadline, possibly averting a tariff hike.

The US imposed an additional 26% reciprocal tariff on Indian goods on April 2, which was later suspended for 90 days. However, the 10% baseline tariff imposed by America remains in place. 

India is reportedly seeking full exemption from the 26% tariff, and failure to reach a deal could result in the tariffs coming into force again. India's Commerce Minister Piyush Goyal has stated that India does not enter into trade agreements based on deadlines and will only accept a deal that is fully finalised, properly concluded, and in the national interest.

India's Tough Stance On Tariffs

Amidst negotiations with America on trade deals, India has hardened its position on giving duty concessions to the US on agriculture and dairy products, considering them sensitive subjects. The country has never opened the dairy sector in any previous trade pacts signed. The US, on the other hand, is looking at duty concessions in sectors like certain industrial goods, automobiles, wines, petrochemical products, dairy, and agriculture items. India may look at duty cuts for labour-intensive sectors like apparel, textiles, gems and jewellery, leather, plastics, chemicals, oil seeds, shrimp, and horticulture products.

The Indian team returned from Washington last week after holding talks with the US on an interim trade pact. While differences remain on steel, aluminium, and auto tariffs, both sides are working towards a mutually beneficial agreement. 

US Treasury Secretary Scott Bessent has recently confirmed that the Trump administration is "close to several deals" and expects to see several big announcements over the next couple of days. However, he refused to name the countries involved, saying, "I don't want to let them off the hook."

As per reports, if trading partners from Taiwan to the European Union do not strike deals with Washington, US tariffs will kick in on August 1. It is also being claimed that the rates will "boomerang back" to the sometimes very high levels announced on April 2, before Donald Trump suspended the levies to allow for trade talks and set a July 9 deadline for an agreement.

As the July 9 deadline approaches, the pressure is mounting on both India and the US to finalise a trade deal. The experts believed that the stakes are high and the negotiations intense, but the outcome remains uncertain.