Washington DC: U.S. President Donald Trump on Tuesday expressed strong confidence that India and the United States are on the cusp of finalising a trade deal that will feature "much less tariffs," fostering increased competition between the two nations. His remarks come as high-stakes bilateral trade agreement (BTA) negotiations enter a critical phase, with a looming July 9 deadline.

"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," President Trump stated.

The ongoing negotiations are pivotal as they precede the expiration of a 90-day pause on tariff escalations. If no agreement is reached by the July 9 deadline, the suspended 26 per cent reciprocal tariffs, initially imposed during the Trump administration on April 2, will automatically be reimplemented. A senior official warned that the "failure of these trade discussions would trigger the immediate reimplementation of the 26 per cent tariff structure."

Sources indicate India has adopted a firmer stance on agricultural matters during these crucial talks. The Indian delegation, led by Chief Negotiator Rajesh Agrawal, has extended its stay in Washington to urgently finalise an interim trade agreement. India's hardened position reflects the politically sensitive nature of its agricultural sector, dominated by small-scale subsistence farmers, making concessions in this area particularly challenging. Notably, India has historically refrained from opening its dairy sector to foreign competition in previous free trade agreements, a precedent it appears unwilling to break even under U.S. pressure.

While the United States is advocating for reduced duties on agricultural products such as apples, tree nuts, and genetically modified crops, India is seeking preferential access for its labour-intensive exports. These include vital sectors like textiles and garments, gems and jewellery, leather goods, and specific agricultural products like shrimp, oilseeds, grapes, and bananas.

Beyond the immediate interim deal, both India and the U.S. are pursuing a comprehensive bilateral trade agreement (BTA), with the first phase aimed for completion by Fall 2024. Their ambitious long-term goal is to substantially increase bilateral trade, targeting $500 billion by 2030, more than double the current $191 billion.

With inputs from ANI