New Delhi, Jul 1: India is on course to finalise an interim trade agreement with the US as early as this week to escape the tariff hike on its exports proposed by President Donald Trump, according to a report in the Financial Times.

India's negotiating team, led by Special Secretary Rajesh Agarwal, is engaged in high-level talks in Washington to conclude the bilateral trade agreement.

External Affairs Minister S Jaishankar is expected to hold one-on-one talks with his US counterpart Marco Rubio on Tuesday or Wednesday on the sidelines of a meeting in Washington, the report stated.

The interim trade deal would be an initial step towards a comprehensive bilateral free trade agreement between Indian and the US.

Indian and US negotiators are aiming to finalise an interim trade deal ahead of the July 9 deadline that has been fixed by US President Donald Trump for the 90-day pause on new tariffs that were to be levied on Indian products.

Negotiations are expected to continue after that for a bigger trade deal to be signed in September-October.

The US is seeking broader market access for its agricultural and dairy products, but for India, this is a livelihood issue for the country's small farmers and hence is considered a sensitive area.

India may allow the import of select agricultural products, such as almonds, as these are already flowing into the country. However, as a quid pro quo, India is likely to press for improved access to the US market for seafood products like shrimp and fish, as well as spices, coffee, and rubber- segments where Indian exporters are globally competitive but face tariff competition in the American market.

India has already started buying more oil and gas from the US to reduce the trade surplus and has offered to increase these purchases.

India has proposed significant tariff reductions, potentially lowering average duties from 13 per cent to 4 per cent, in exchange for exemptions from US tariff hikes imposed during the Trump administration. These concessions are on the same lines as those offered in the recent bilateral free trade agreement that India has signed with the United Kingdom.

India is seeking market access for its industrial products such as steel, aluminium, auto components and pharmaceutical goods. Recently, the US doubled safeguard duties on steel and aluminium imports to 50 per cent, which has adversely impacted India's exports. Although India has moved the WTO with the issue, it is hoping to settle the issue through the bilateral trade agreement.

Trade between India and the US touched the $129 billion mark in 2024, with New Delhi recording a trade surplus of $45.7 billion.

In February, Prime Minister Narendra Modi and Trump launched 'Mission 500', an initiative aiming to double bilateral trade to $500 billion by 2030. The joint decision was announced during PM Modi’s visit to Washington.

(IANS)

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