The trade negotiations between India and the US have become challenging because the talks in New Delhi failed to produce significant progress regarding essential tariff matters. The two countries failed to reach an agreement during six days of intense negotiations because of their disagreement regarding American protectionist policies that include 50% steel and aluminium tariffs and a 10% baseline tariff on all imports.
The Indian government has proposed lowering its tariffs on American imports through a bilateral trade agreement but requires corresponding concessions from the United States. The July 9 deadline approaches as Brendan Lynch and Rajesh Agrawal lead their negotiating teams to prevent fresh US tariffs from affecting Indian products.
The Indian government requires the United States to remove additional duties which include both a 16% reciprocal tariff threat and safeguard measures for steel and aluminium and auto components. The United States maintains its position that its goods should enter duty-free while refusing to provide equivalent concessions to India.
The current US tariff structures create major compliance challenges for Indian exporters despite India’s willingness to offer goodwill measures including bourbon whiskey and motorcycle duty reductions and Google Tax elimination and Starlink approval.
The talks risk failure because of a lack of quick agreement which would intensify the existing strain on bilateral trade relations.
