India’s hopes of clinching a mini-trade deal with the United States before the July 8 deadline are facing a tough challenge. Washington’s reluctance to exempt India from the hefty 50 percent steel and aluminium tariffs threatens to delay the agreement. A person familiar with the talks said the US has not yet agreed to a complete exemption on these tariffs, raising concerns about the deal’s timeline. India and the US are scrambling to finalise the first leg of a Bilateral Trade Agreement (BTA) before President Donald Trump’s country-specific reciprocal tariffs kick in on July 9.
The US decision to double the steel and aluminium duty from 25 percent to 50 percent has complicated the talks. “The decision to increase the steel and aluminium duty from 25 percent to 50 percent is going to impact the timeline of the deal, especially since they are not yet willing to exempt it entirely. Then there is also a question mark on the 10 percent baseline tariff,” the person said. Even as the countdown continues, India remains focused on securing relief from these steeper tariffs that could derail the export momentum.
India’s $4.56 Billion Metal Exports At Stake
India exported $4.56 billion worth of iron, steel, and aluminium products to the US in FY25, putting tariff exemptions at the center of the ongoing trade talks. On May 13, India took the dispute to the World Trade Organization (WTO), proposing retaliatory duties against the US steel and aluminium tariffs. The US quickly rejected India’s move and escalated the issue by hiking tariffs to 50 percent for all countries starting June 4. “Over $3 billion worth of steel-related exports may be at risk due to steeper American duties on imports,” the person familiar with the matter said.
Trade-Offs: Almonds, Pistachios, And A Race To The Finish
India is ready to sweeten the pot by offering tariff cuts on select American farm products like almonds and pistachios, hoping to crack open the door to lower duties on its automobile parts and essential medicines in return. Industry bodies have been pressing the government to lock in exemptions from the steep steel and aluminium tariffs, but Trump’s rapid-fire tariff hikes are keeping negotiators on their toes. Both countries are racing against the clock to clinch a mini-trade deal before the July 9 deadline, when Trump’s country-specific reciprocal tariffs are set to kick in.
The mini-deal is part of the broader Mission 500 plan, a joint effort to double India-US bilateral trade to $500 billion by 2030. The latest round of talks kicked off in New Delhi on June 5 and will now stretch until June 10, with negotiators scrambling to bridge gaps and strike common ground before the clock runs out.
