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BUSINESS & TRADE JULY 25, 2025 | The Indian Eye 34

Tough Bargaining, Tight Deadlines: India,

US Enter Crucial Phase of Trade Deal Talks

With Trump pushing for deeper market access and India holding its ground on key sectors, the
path to a bilateral trade deal is paved with high-stakes negotiation and strategic maneuvering

OUR BUREAU
Washington, DC / New Delhi
he trade dialogue between India and the
United States has entered a decisive phase
Tas a high-level Indian delegation led by Chief
Negotiator Rajesh Aggarwal arrived in Washington
this week to resume in-person negotiations on a
proposed Bilateral Trade Agreement (BTA). The
discussions, set to continue for four days, reflect
rising urgency on both sides to break the deadlock
ahead of the August 1 tariff deadline announced by
President Donald Trump.
While India and the U.S. have agreed in prin-
ciple to expand bilateral trade to $500 billion by
2030, hard negotiations are now underway to iron
out complex differences in sectors like agriculture,
automobile tariffs, digital trade, and pharmaceu-
ticals. India, sources say, is keen on protecting its
domestic interests, especially in sensitive sectors
that impact rural livelihoods and small business-
es. Meanwhile, the U.S., under Trump’s renewed
protectionist stance, is demanding greater access
to Indian markets for American agricultural and
industrial goods.
Officials familiar with the matter confirmed
that recent virtual meetings between trade teams
laid the groundwork for this week’s face-to-face
talks. A structured strategy is evident, with India
sending an advance team to manage procedural Trump has been privately hinting that India should consider a deal modeled after the recent U.S.-Indonesia trade framework (ANI)
frameworks before substantive negotiations kicked
off under Aggarwal’s leadership. unveiled a sweeping list of new tariffs on 14 coun- American produce.
The talks gained traction following Trump’s tries. Brazil was hit hardest with a 50% tariff on “We need outcomes that are politically and
controversial tariff policy earlier this year, tar- copper, while Indonesia, Thailand, and Cambodia economically sustainable,” said another Indian ne-
geting countries with trade surpluses against the are among others facing penalties ranging from gotiator. “This isn’t just about trade numbers. It’s
U.S. India, long in Washington’s sights for its ex- 30–40%. The message was clear: trade imbalances about sovereignty and long-term industrial policy.”
port-heavy trade balance, was initially set to face will not be tolerated. The Biden-era detente on tariffs had allowed
additional tariffs by April. That deadline was India, by contrast, has managed to buy time— trade talks to progress more slowly, but Trump’s
pushed to August 1, granting negotiators a narrow but the price may be steep if a deal isn’t sealed return has reshaped the calculus. His administra-
window to finalize a deal. before August. “Trump is using tariffs not just as tion’s decision to hit even traditional allies like Ja-
According to sources, Trump has been private- punishment but as leverage,” noted a Washing- pan and South Korea with 25% tariffs has jolted
ly hinting that India should consider a deal mod- ton-based trade analyst. “India is next in line un- capitals across Asia and beyond.
eled after the recent U.S.-Indonesia trade frame- less this deal is done.” Back in Washington, sources say the mood is
work—an agreement that included market access, Trump’s approach, while aggressive, is not intense but focused. Both teams are under pressure
tariff reductions, and digital trade cooperation, but without a strategic angle. By dangling the pros- to deliver a framework before July ends. A success-
also required significant concessions from Jakarta. pect of punitive tariffs, he hopes to force reluctant ful conclusion could reshape bilateral trade flows
For New Delhi, this suggestion raises red flags, as partners into compliance, all while portraying for a decade. A failure could trigger retaliatory tar-
officials are wary of being pressured into an agree- himself domestically as a defender of American iffs, harden stances, and slow down momentum on
ment that could jeopardize long-standing regulato- manufacturing. broader U.S.-India strategic cooperation.
ry protections and strategic autonomy. But India is playing the long game. New Delhi While officials have refrained from offering a
“India will not be rushed,” said a senior offi- is looking to secure not only tariff concessions but timeline for conclusion, both sides agree that this
cial close to the talks. “We are open to a balanced also stronger guarantees around digital services, round of negotiations is critical.
agreement that supports growth on both sides, but labor mobility, and green technologies. The Indian “The next few days will determine not just the
not one that demands structural compromises un- side is particularly cautious about agriculture—an future of this deal,” said one U.S. official, “but
der deadline threats.” area where domestic sensitivities run deep—and the tone of our economic partnership for years
Adding to the pressure, Trump on Wednesday wary of opening the floodgates to subsidized to come.”

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