India is making an aggressive push to finalise the early tranche of a Bilateral Trade Agreement (BTA) with the United States before the July 9 deadline, when former President Donald Trump's proposed reciprocal tariffs on Indian goods are expected to take effect.

Commerce Secretary Sunil Barthwal, addressing a press briefing in New Delhi on June 16, expressed optimism that the two sides will be able to wrap up the first segment of the trade pact within the tight timeline.

“We are working out an early tranche... there is a date July 9. Before that we would like to conclude that early tranche. Both teams are visiting each other, so there is good progress in talks,” said Barthwal.

This early deal comes amid reports of disagreements on duties and tariffs, which the negotiators are trying to resolve through a scaled-down arrangement, pending the finalisation of a comprehensive BTA by Fall 2025.

Ongoing US-India Trade Talks

According to Special Secretary Rajesh Agarwal, the BTA negotiations are progressing well. He noted that officials from both countries have engaged in physical and virtual meetings, and are keen to continue the momentum.

A recent round of in-person discussions was held in New Delhi between June 5 and June 10.

Barthwal further clarified that the BTA with the United States is part of a trio of major trade deals that India is actively pursuing. The first, with the United Kingdom, has been concluded, while the second, with the European Union (EU), is in an advanced stage.

India-UK FTA Ready for Signing

The India–UK Free Trade Agreement (FTA), which was finalised on May 6, 2025, is currently undergoing legal vetting. Once this stage is complete — expected within three months — both nations are likely to sign the agreement.

However, as Special Secretary L Satya Srinivas pointed out, the FTA may take over a year to be operational due to the lengthy ratification process in the UK.

The deal is significant for Indian exporters, who will benefit from duty elimination on nearly 99 percent of tariff lines, covering virtually 100 percent of trade value.

India-EU Talks Intensify for July Deadline

On the India-EU trade front, the government is targeting an early harvest agreement by July as well. Special Secretary Srinivas said negotiations have intensified, with frequent rounds replacing the earlier quarterly pace.

“Good momentum is there and the frequency of meetings has picked up. We are working towards convergence on many key issues,” Srinivas said.

The next round of talks with the EU is scheduled for July 7, and negotiators are hopeful of substantial progress, especially on tariff harmonisation, services, digital trade, and intellectual property rights.

Broader FTA Strategy: Latin America and Oceania in Focus

India’s trade ambitions extend beyond the US, UK, and EU. The government is also holding talks with Chile, Peru, and New Zealand to forge new or updated trade pacts.

These are part of a broader strategy to:

• Diversify export markets

• Reduce dependence on traditional partners

• Enhance access to commodities, agri-products, and niche manufacturing sectors

Trump’s Tariff Pressure Driving Pace

The urgency to close the early BTA tranche with the US stems from Trump’s announced reciprocal tariff of 16 percent on Indian imports, which will be enforced on July 9 if talks fail.

This has pushed Indian negotiators to prioritise segments of mutual interest, such as:

• Tariff reduction on select agricultural and industrial goods

• Easing of non-tariff barriers

• Pharmaceutical and IT services access

• Resolution of long-standing digital trade taxation issues

Geopolitical Context and Trade Alignment

India’s alignment with like-minded economies through targeted FTAs also comes at a time when global trade tensions and supply chain realignments are gaining speed.

With the world becoming increasingly fragmented between US-led Western frameworks and China-centred alternatives, India is positioning itself as a neutral and credible economic partner for both blocs.

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