Prospects dim for India US Trade Pact before August 1 deadline

The likelihood of an interim trade agreement between India and the United States before Washington’s August 1 deadline has weakened, as negotiations remain stuck on tariff cuts for key agricultural and dairy products,according to information.According to sources,U.S. President Donald Trump had threatened to impose a 26% tariff on Indian imports in April, but the implementation was paused to allow negotiations. That pause ends on August 1, though India has not yet received a formal tariff letter, unlike more than 20 other nations.
India’s trade delegation, led by chief negotiator Rajesh Agrawal, returned from Washington after a fifth round of talks without a breakthrough. “An interim deal before August 1 looks difficult, though virtual discussions are ongoing,” according government officials, adding that a U.S. delegation is expected to visit New Delhi soon for further negotiations.
Talks have stalled as New Delhi resists opening politically sensitive agriculture and dairy sectors, while Washington opposes India’s demand for relief from higher tariffs on steel, aluminium, and autos. Officials are exploring whether these contentious issues can be deferred to a later stage, after a limited agreement, according to information.
Ajay Sahai, Director General of the Federation of Indian Export Organisations, warned that sectors such as gems and jewellery could be severely impacted if the 26% tariffs take effect. “However, this could be temporary, as both countries aim to sign the deal over time,” he added.
Meanwhile, U.S. Treasury Secretary Scott Bessent reportedly stated on Monday that the Trump administration prioritizes the quality of trade agreements over timing. Asked if the deadline could be extended for countries in talks, he said the decision rests with the President.Indian officials remain hopeful of finalizing a broader trade pact by September or October, consistent with the timeline discussed by Prime Minister Narendra Modi and President Trump in February. “Given that there have been five rounds of negotiations and another U.S. delegation is expected, we remain optimistic,” a  government source stated.Both the Indian Commerce Ministry and the U.S. Trade Representative’s Office declined to comment immediately.