India-US mini trade deal likely to leave out sensitive sectors: CII President

India and the United States are moving closer to finalising the first phase of a bilateral trade agreement, though sensitive sectors such as agriculture and dairy are unlikely to be part of the immediate deal, Confederation of Indian Industry (CII) President Rajiv Memani said on Thursday.

Addressing his first press conference after taking over as CII president, Memani said both sides were aiming to secure early gains while deferring issues with deeper political implications, reported Moneycontrol.

“The level of preparation and engagement with India Inc has been detailed. We will not have 100% winners. FTA will be done in phases, so tricky areas with greater political ramifications will be dealt with later. Hoping to get a satisfactory deal,” Moneycontrol quoted Memani as saying.

Talks have reached a crucial stage ahead of a July 9 deadline for reimposition of the United States’ suspended 26% reciprocal tariffs on Indian goods. The tariffs, imposed on April 2, were suspended for 90 days, though a 10% baseline tariff remains in place.

The Indian delegation, led by special secretary Rajesh Agrawal of the Department of Commerce, has extended its stay in Washington. Initially scheduled for two days from June 26, the talks are focused on finalising an interim trade agreement.

India has toughened its stance against granting duty concessions to US agricultural products while seeking tariff cuts for its labour-intensive exports such as textiles, engineering goods, leather, and gems and jewellery.

The US is pressing for duty concessions on agricultural items, including dairy, apples, tree nuts, and genetically modified crops, as well as industrial goods, automobiles, wines, and petrochemical products.

India’s agriculture and dairy sectors remain politically sensitive due to their reliance on small, subsistence farmers, and the country has not opened its dairy sector in any of its free trade pacts so far.

The immediate agreement is expected to address low-hanging trade barriers and pave the way for broader cooperation, while politically sensitive tariff lines may be taken up in subsequent phases.

India's GDP growth

Memani also said that Indian economy is expected to grow by 6.4-6.7% during the current financial year driven by strong domestic demand, even as geopolitical uncertainty poses downside risks.

"We expect (economic growth in) a range of 6.4 to 6.7%," Memani said in response to a question on CII's gross domestic growth (GDP) forecast for India during 2025-26.

Observing that there are some obvious risks, he said, "a lot of these relate to external trade risk. I think a lot of them have been factored in, and also there are some upside. So hopefully they should get balanced out... From a CII standpoint, we're looking at 6.4 to 6.7% growth".