India-US trade deal nears the finish line—final talks are set for early June

New Delhi: India and the US are racing to finalise a long-awaited bilateral trade agreement, with the American negotiating team expected to arrive in New Delhi next week for potentially the final round of face-to-face discussions, a senior Indian official said.

Both sides are aiming to close the deal by the last week of June, before the 90-day pause on the US’s reciprocal tariffs ends on 8 July—a deadline that has added urgency to the negotiations.

The breakthrough followed months of quiet shuttle diplomacy and two earlier rounds of in-person meetings led by Indian officials and one round of in-person discussion by a US delegation in March. 

Speaking at the CII Annual Business Summit on Thursday, Rajesh Agarwal, India’s chief negotiator and special secretary in the commerce ministry, gave a rare and wide-ranging public update on the trade talks, linking them to a shifting global landscape and growing disruptions in supply chains.

“We all believed in a rule-based global trading system, but non-market practices have taken root,” Agarwal said, pointing to weakening of multilateral institutions and the rise of politicised trade as key reasons behind the current global unpredictability. “Markets and supply chains are now being weaponised.”

On the trade deal with the US, Agarwal said India is approaching it with a clear sense of complementary strengths. “Most of what we make, the US doesn’t. Most of what they make, we don’t. There’s very little overlap—this is a natural fit.”

He stressed that the decision to negotiate a bilateral trade agreement with the US was made well before Washington imposed reciprocal tariffs. “This was never just about tariffs or deficits. We saw a strategic opportunity for both sides. If done right, this can be a defining partnership in global trade.”

On 28 May, a US federal court declared US President Donald Trump’s reciprocal tariffs as illegal, prompting calls from experts in India for New Delhi to reconsider its approach to the ongoing trade negotiations with Washington.

As part of the negotiations for a bilateral trade agreement with the US, Indian negotiators are preparing to open up sensitive sectors, including automobiles and agriculture, and allow greater foreign access to government procurement and digital infrastructure.

Mint reported exclusively earlier this month that India was likely to finalise a trade deal with the US before the 8 July cutoff, which would help New Delhi avoid Trump’s tariffs and reset the bilateral trade relationship on a more stable footing.

‘Unlock the opportunity’

India’s chief negotiator acknowledged that Washington’s concerns around trade deficits are driven by domestic politics but argued that those concerns should not derail efforts to create a mutually beneficial pact. 

“We must aim for a deal that builds on our comparative advantages and offers long-term gains for businesses on both sides,” Agarwal said. “India is ready. The world is ready. Now it’s up to our businesses to unlock this opportunity.”

Agarwal argued that in this shifting global environment, countries with large markets or control over supply chains are increasingly leveraging their economic heft to pursue strategic interests. “That’s a big challenge for the global trading order today,” he added.

Despite these challenges, Agarwal said India stands to benefit from this flux. “India is uniquely poised. We are a large and growing market, and at the same time, we are a reasonably big producer,” he said. 

While manufacturing accounts for around 15% of India’s GDP, the sector generates nearly $500 billion in gross value added (GVA), making India a credible player in global production networks.

Agarwal also highlighted India’s global reputation as a trusted partner, rooted in a foreign policy that is non-aligned, issue-based, and principles-driven. “We are friends to all. That’s why today, in an unpredictable world, countries are looking to India not just for trade, but for long-term, stable partnerships,” he said.

India’s appeal beyond its market

According to Agarwal, India’s growing profile is reflected in the global rush to ink trade agreements with New Delhi. “We’re negotiating with the UK, the EU, Australia, New Zealand, Chile, Peru, and the Gulf nations. The US too, which hadn’t pursued a bilateral trade deal in over a decade, is now at the table,” he said.

India’s appeal goes beyond market size, Agarwal said. “Other countries know they can’t just export to India—they need to invest here, build capacities, and become part of our growth story. That’s why they want predictability through trade agreements.”

On Thursday, the Reserve Bank of India said that despite rising geopolitical tensions and protectionist trade policies, India’s negotiations for new trade deals with the US, Oman, Peru, and the European Union are expected to provide fresh impetus to trade growth.

Agarwal called on Indian businesses to seize the moment. 

“We can’t afford to be import-dependent. With 1.4 billion people, India must become both a major supplier to the world and a resilient consumer economy. This is the time to build capabilities, especially in critical supply chains and advanced technologies,” he urged.

Pointing to government initiatives like the production-linked incentive (PLI) scheme and support for technology and electronics manufacturing, Agarwal said that the government is willing to step in where industry faces genuine hurdles. 

“We want to support you, but you must guide us on where help is needed,” he said. “Our growth target of a $30 trillion economy by 2047 cannot be met without a strong and self-driven industry.”

Also read | Trade talks with Japan, Asean, and others likely to get impetus after completion of US, and EU deals