India, US unlikely to clinch mini trade deal before August 1: Report

A mini trade deal between India and the United States is unlikely to be finalised before the August 1 deadline, CNBC-TV18 reported on Tuesday, citing people aware of the matter.

The report comes as officials from both countries concluded the fifth round of negotiations for a proposed bilateral trade agreement in Washington last week.

“For the next round of talks, the US team will visit India in the second half of August,” PTI quoted an Indian government official as saying.

India's chief negotiator Rajesh Agrawal and Assistant US Trade Representative for South and Central Asia Brendan Lynch led the recent discussions, which focused on issues including agriculture, automobiles, non-market economies, and SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies).

Both sides had been aiming to finalise an interim deal before August 1, the end of a suspension period for tariffs imposed by US President Donald Trump.

In April this year, Trump announced reciprocal tariffs on several trading partners, but their implementation was suspended until July 9 and subsequently extended to August 1 as negotiations continued.

Meanwhile, Trump has been sending out tariff notification letters to smaller trading partners, including the Philippines, Brunei, Moldova, Algeria, Libya, Iraq and Sri Lanka.

India, which is currently negotiating the trade pact, has not been targeted in these initial lists, providing some relief to Indian exporters.

However, it is yet to be seen if the Trump administration will extend the deadline in case India and the US fail to secure an interim trade deal before August 1.

India is seeking the removal of an additional 26% tariffs as well as easing of levies on steel, aluminium, and autos.

The US is reportedly demanding duty concessions on industrial goods, electric vehicles, wines, petrochemicals, agricultural products, dairy items, apples, tree nuts, and genetically modified crops.

Farmers' associations in India have urged the government not to include agriculture in the pact, while New Delhi has so far also resisted any duty concessions for dairy in trade deals.

Both countries aim to conclude talks for the first tranche of the bilateral trade agreement by fall (September-October) this year, with an interim pact under discussion beforehand.

India’s merchandise exports to the US rose 22.8% to USD 25.51 billion in April-June, while imports increased 11.68% to USD 12.86 billion.