India, US Eye Interim Trade Pact by June 25 Deadline
India and the United States are reportedly working toward finalizing an interim trade pact by June 25, 2025. This proposed agreement is aimed at resolving key trade disputes and preempting the imposition of a 26% reciprocal tariff by the U.S. on Indian exports, scheduled to come into effect on July 9. If successful, the pact will serve as a bridge toward a comprehensive Free Trade Agreement (FTA) between the two nations.
The trade initiative follows recent high-level meetings between Indian Commerce and Industry Minister Piyush Goyal and senior U.S. trade officials in Washington. Both sides have expressed urgency in sealing the interim deal to provide immediate relief to exporters and stabilize bilateral trade flows.
Interim Trade Agreement Negotiations Underway
Indian negotiators are pushing for full exemption from the steep 26% U.S. tariff on specific Indian goods, particularly in labor-intensive sectors. In return, India is offering tariff reductions on a variety of U.S. imports, though it has reportedly drawn red lines around sensitive sectors like dairy and grains.
The United States, meanwhile, is advocating for improved access to Indian markets for electric vehicles, petrochemicals, and certain agricultural products. Sources familiar with the talks indicate that the agreement may prioritize sectors with high potential for mutual gains while deferring more contentious issues for the full trade pact discussions.
A delegation from the U.S. is expected to visit India in early June to further negotiate the terms and finalize the draft. The agreement, if concluded, could be announced by late June, just in time to avert the July 9 deadline for the new tariffs.
Tariff Exemption and Economic Impact
The interim deal is expected to bring substantial benefits to Indian industries such as textiles, gems and jewellery, and leather goods by securing duty concessions and restoring competitiveness in the U.S. market. It could also streamline regulatory hurdles and facilitate smoother customs procedures for exporters on both sides.
For the United States, the pact may offer expanded access to one of the world’s fastest-growing consumer markets and support American firms facing declining demand in other regions. Officials from both governments have expressed their long-term goal of increasing bilateral trade volume to $500 billion by 2030.
While a comprehensive trade deal may take more time, this interim agreement is poised to deliver a tangible boost to India-U.S. commercial ties and serve as a template for deeper economic integration in the years ahead.
