Trump Signals Breakthrough in India Trade Deal with Promise of ‘Much Less Tariffs’

With July 9 tariff deadline looming, both nations push to resolve deadlock over dairy and agriculture in landmark bilateral trade agreement

Washington D.C. | July 2, 2025 — As the July 9 tariff deadline fast approaches, U.S. President Donald Trump hinted at a possible breakthrough in the India-U.S. trade talks, stating that both countries are close to a deal that could significantly reduce tariffs and enhance market access for American companies.

“I think we are going to have a deal with India. And that is going to be a different kind of a deal. It is going to be a deal where we are able to go in and compete. Right now, India does not accept anybody in. I think India is going to do that, and if they do that, we are going to have a deal for much less tariffs,” said Trump aboard Air Force One on Tuesday.

The President’s comments come amid an intense round of negotiations between Indian and U.S. delegations to finalize a bilateral trade agreement (BTA) before Trump’s ‘Liberation Day’ tariff moratorium ends on July 9.

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Final Push Before Deadline

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A delegation led by India’s chief trade negotiator Rajesh Agrawal remains stationed in Washington D.C., having extended its visit to resolve last-mile issues and avert the imposition of a 26% tariff on Indian exports.

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The U.S. is demanding access to India’s tightly guarded dairy sector, along with reduced duties on agricultural products such as apples, almonds, and genetically modified crops. India has so far resisted, citing cultural and religious sensitivities, particularly with dairy production.

Conversely, India is pushing for concessions in sectors where it seeks export growth, including textiles, gems and jewellery, leather, shrimp, oilseeds, bananas, and grapes.

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Deadlock and Opportunity

Despite weeks of back-and-forth discussions, the talks hit a roadblock over India’s refusal to open its dairy sector—a first-of-its-kind demand by any trade partner.

However, President Trump’s latest remarks indicate renewed optimism that a mutually beneficial arrangement could be reached—potentially redefining trade relations between the world’s largest and fifth-largest economies.

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Strategic Ties and Tariff Pressure

The White House recently noted that U.S.-India ties remain strong, and a trade deal announcement could be imminent. The agreement is also viewed in geopolitical terms, as Washington aims to strengthen economic ties with New Delhi amid tensions with Beijing.

If a deal is not inked by July 9, the Trump administration’s 26% tariff on Indian goods will be reinstated, significantly impacting Indian exporters and widening the trade gap.

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Conclusion

While Trump remains bullish on striking a deal with India, the next few days are crucial. The outcome will not only define the trajectory of India-U.S. trade ties but could also send ripples through the global trade landscape as protectionism, market access, and bilateral diplomacy collide in a high-stakes negotiation.

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Tags: India-US trade deal, Trump tariff deadline, July 9 tariffs, Rajesh Agrawal, dairy trade deadlock, agricultural tariffs, bilateral trade agreement, PM Modi, US foreign trade, Indo-US relations