India and the United States are likely to finalise only a mini trade deal this year as both countries remain far from a comprehensive agreement, according to senior government sources. This development comes amid recent comments by US Secretary of Commerce Howard Lutnick, who expressed optimism about a trade deal materialising in the not too distant future.

A senior government official told The Hindu that the commitment of the two leaders — Prime Minister Narendra Modi and US President Donald Trump — is to have something tangible to show by the fall of 2025, typically spanning September to November. However, the official clarified that any deal announced this year would be limited to a few sectors only.

Trade negotiations between large economies like India and the United States are complex and often take several years to conclude. Hence, a mini-deal covering specific areas is the realistic expectation for 2025.

The discussions have been further complicated by tariff tensions, especially concerning steel and aluminium imports. On May 31, Mr Trump announced via his Truth Social account an increase in import tariffs on steel and aluminium from the existing 25% to 50%, effective June 4.

The Indian government had already informed the World Trade Organisation (WTO) that it reserves the right to impose retaliatory tariffs against the US following the earlier 25% tariff imposition in March 2025.

A second official revealed that the Ministry of Commerce and Industry is currently internally discussing measures in response to the tariff hikes. A stakeholder consultation meeting is likely to take place to deliberate on possible actions.

It remains unclear whether the tariff dispute will be addressed within the trade deal negotiations or handled separately. The Indian government is exploring all options to safeguard its trade interests while advancing talks with the United States.

The coming months will be crucial in shaping the India-US trade relationship amid global economic uncertainties and geopolitical challenges.

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