India-US Interim Trade Deal Timeline Remains Uncertain Amid Ongoing Negotiations

USTR Jamieson Greer’s visit advances bilateral discussions, but tariff issues and policy changes continue to delay an interim trade agreement.

A three-day visit by a delegation headed by United States Trade Representative (USTR) Ambassador Jamieson Greer has contributed to ongoing efforts to finalise an interim India-US trade agreement.

During meetings with India's Commerce and Industry Minister, Piyush Goyal, both sides reviewed the progress of trade negotiations and discussed ways to deepen bilateral economic cooperation. According to the report, India is not targeting any specific deadline, including July 24, for concluding the agreement, with discussions focused on securing safeguards against future unilateral US tariff actions and improving market access.

The report states that the United States is seeking a fair, reciprocal trade arrangement that is mutually beneficial to both countries.

Although a bilateral trade agreement had been expected before the July 24 deadline, the report notes that this timeline may be difficult to achieve because the future US tariff framework remains uncertain.

India and the United States had agreed to a framework trade deal on February 2. Under that arrangement, the US proposed reducing tariffs to 18% while India agreed to reduce tariffs on US industrial and agricultural products, with firm commitments excluding genetically modified maize and soya bean, as well as dairy products.

Subsequently, US President Donald Trump's tariff measures were invalidated by the US Supreme Court. The US administration then introduced a uniform 10% tariff on imports from all countries for 150 days, effective until July 24.

To strengthen its negotiating position, the United States also initiated investigations under Section 301 of the Trade Act of 1974 and imposed an additional 12.5% duty on India and other countries, citing the use of inputs allegedly produced through forced labour. A separate investigation concerning excess capacities is also underway.

According to the report, India disputes the legal basis of these investigations while continuing to engage with the US on the Section 301 proceedings. Hearings on the revised tariff proposal are scheduled for July 7.

The report notes that India could secure lower tariffs of 10% if it addresses US concerns related to forced labour import restrictions. It also states that India maintains a dedicated market access regime designed to prevent supply chain human rights violations and argues that its textile companies do not rely on cotton imports from Xinjiang, where allegations of forced labour have been raised.

However, Chinese supplies remain important for synthetic and blended textiles, particularly specialty yarns and performance fabrics. According to the report, the proposed USTR framework could increase compliance costs for India's textile and garment exporters, potentially reducing operating margins, which typically range between 5% and 8%.

The report concludes that greater clarity on the future tariff framework is required before an interim trade agreement can be finalised. It also notes that farmer organisations remain concerned about US demands for greater market access for subsidised agricultural products, while Indian officials continue discussions on additional US requests, including purchases of approximately $500 billion worth of American energy, information and communications technology products, and other goods.

The report adds that Section 301 tariffs could also face legal challenges, suggesting that India has an interest in ensuring that any trade agreement is not undermined by future developments. It further notes that the direction of US tariff policy may depend on the outcome of the US mid-term elections in November.