Sixth Round of India-US Trade Talks Set for 25th August Amid Tariff Pressure; Interim Trade Pact Likely Before 1st August as Negotiations Intensify

US delegation to visit India on 25th August for further discussion on Indo-US trade deal

New Delhi, July 29: The United States is set to send a delegation to India on August 25th for the sixth round of bilateral trade agreement negotiations, as confirmed by an Indian official on Tuesday. These talks are taking place at a critical juncture, with both countries striving to finalise an interim trade deal before the 1st August deadline. This date marks the end of the suspension of US-imposed tariffs, adding urgency to the ongoing discussions. The fifth round of talks concluded last week in Washington, led by India’s Special Secretary in the Department of Commerce, Rajesh Agrawal, and Brendan Lynch, Assistant US Trade Representative for South and Central Asia.

Key Sticking Points: Agriculture, Dairy, and Tariff Demands

India has maintained a firm stance against US demands for tariff concessions on agriculture and dairy products, reiterating its position of not offering duty cuts on dairy in any free trade agreement to date. This stance is further bolstered by opposition from several Indian farmers’ associations against including agriculture in the trade pact.

India, on its part, is pushing for the removal of the 26% additional tariff, along with tariff relief in sectors such as steel and aluminium (50%) and the auto industry (25%). These demands are central to India’s negotiation agenda, with the country also indicating its right under World Trade Organisation (WTO) norms to impose retaliatory duties if necessary.

India’s Wish List: Relief for Labour-Intensive Exports

New Delhi is pressing for duty concessions for labour-intensive sectors, including:

• Textiles
• Gems and jewellery
• Leather goods
• Garments
• Plastics
• Chemicals
• Shrimp
• Oil seeds
• Grapes and bananas

US Priorities: Industrial Goods and Agri Access

Conversely, the US is advocating for lower tariffs on a wide range of items, such as:

• Industrial goods
• Automobiles, including electric vehicles
• Wines and petrochemicals
• Agricultural products, especially dairy items, apples, and tree nuts
• Genetically modified crops

Outlook: Interim Pact Before Full Agreement

Both nations are focusing on securing a limited interim pact before the 1st August tariff deadline. Beyond this, they also express hope of concluding the first tranche of the proposed Bilateral Trade Agreement (BTA) by fall 2025 (September–October).

Bilateral Trade Snapshot

In the April–June quarter of FY26, India’s merchandise exports to the US experienced a significant rise of 22.8% year-on-year, reaching USD 25.51 billion. Concurrently, imports from the US also grew by 11.68%, totalling USD 12.86 billion.

As the 1st August deadline rapidly approaches, the outcome of the next round of talks will be crucial in shaping the future trajectory of trade relations between India and the United States.

Looking Ahead

As the clock ticks toward the 1st August deadline, both India and the US are under pressure to finalise an interim trade pact that averts the re-imposition of steep tariffs. The success of this limited agreement could provide critical breathing space for resolving broader trade disputes in upcoming negotiations. Key sectors such as agriculture, dairy, and industrial goods remain contentious, but the willingness to intensify talks signals mutual interest in a workable compromise. With trade flows on the rise, both sides have economic incentives to avoid disruption and lay the groundwork for a more comprehensive deal by fall 2025.

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations