India has proposed a new round of trade talks with the United States, with agriculture emerging as a central issue in the negotiations. After the US extended the deadline for reciprocal tariffs to August 1, a team of Indian trade negotiators led by Special Secretary Rajesh Agrawal is expected to travel to the US next week to address outstanding issues holding back the interim trade agreement.
According to a government official, “The trade negotiators are confident that the differences with the US team on agriculture will be bridged in the upcoming round, as there is already broad consensus on the subject between the two teams”. A formal proposal for these fresh negotiations has been sent to the top levels of the Indian government.
The likelihood of finalizing an interim trade deal soon has increased, especially after the US imposed 25-50 per cent tariffs on nearly 20 countries but has so far refrained from targeting the European Union and India.
President Donald Trump recently stated that the US is close to signing a trade deal with India, further boosting optimism. Indian negotiators have reportedly offered the US substantial market access in most sectors, but have drawn clear red lines around sensitive areas like dairy and agriculture, which remain politically and economically vital for India.
In exchange, India is seeking lower tariffs for its labor-intensive exports such as textiles and footwear.
Despite the progress, agriculture and dairy continue to be the main sticking points. India is firm on protecting its farmers’ interests and is not willing to open up these sectors fully to US imports, especially given concerns about the impact on small farmers and rural livelihoods.
The Indian government has emphasized that any agreement will be made with the interests of its farmers in mind, and no compromise will be made under external pressure. Both sides are expected to agree on the framework for the first phase of the bilateral deal by fall 2025, with the interim agreement potentially preceding it
