Despite regular contact between Prime Minister Modi and President Trump, the timeline for an interim bilateral trade deal is extending further into 2026. Fresh developments, such as US threats of new tariffs on Indian basmati rice and pressure from the farm lobby, have added layers of uncertainty. While negotiator-level talks have progressed well, the final agreement awaits the US President’s approval.
India is currently pursuing a two-track negotiation strategy: securing a framework to address reciprocal tariffs by the end of this year, followed by a longer-term interim agreement. A major focus for India is getting the US to roll back its current 50% tariffs to levels below those of competitors like Vietnam and Bangladesh. In exchange, India has shown a willingness to accommodate US requests on industrial commodities, while maintaining “red lines” on agricultural duties for GMO products.
Minister Piyush Goyal has stated that India will not negotiate under hard deadlines, emphasizing that a deal must be mutually beneficial. To show cooperation, India has been significantly reducing its reliance on Russian oil and increasing its purchases from the US. However, officials warn that India must hold firm to its national interests rather than succumb to pressure for a one-sided trade deal.
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