Indian finance minister Nirmala Sitharaman has said India would love to have a “big, beautiful” trade deal with the US, as Washington and New Delhi race to clinch an agreement before the 9 July deadline when punitive tariffs are set to kick in.
However, the minister also laid out India’s red lines as she expressed hopes for an interim Bilateral Trade Agreement (BTA) between the two “strong economies.”
Her remarks came after US president Donald Trump last week said a “very big” deal with India was “coming up” soon, even though negotiators on both sides appeared to have hit a deadlock over key issues.
The US is India’s largest trading partner, with the value of their bilateral trade reaching $190bn recently.
But after taking office for his second term in January, Mr Trump branded India a “tariff king” and a “big abuser” of trade ties. He has threatened to impose an additional tariff of up to 26 per cent on Indian goods. Although steep, the levy is still lower than the total 104 per cent imposed on China, 49 per cent on Cambodia, and 46 per cent on Vietnam.
The additional duties are due to kick back in after a 90-day pause, targeting products like machinery, pearls, mineral fuels, and more.
“I’d love to have an agreement, a big, good, beautiful one; why not?” Ms Sitharam said in an interview with The Financial Express.
“The US is one of our leading trade partners, topmost if anything. At the junction we are in, and given our growth goals and ambition to reach Viksit Bharat [developed India] by 2047, the sooner we have such agreements with strong economies, the better they will serve us. So, I’d rather put my own statement on (Trump’s),” she added.
She nonetheless noted that protecting India’s agriculture and dairy industries have been among the “major red lines” in the BTA talks with the US.
“The negotiating team ensured that the industry’s concerns were all taken on board before they sat at the table. Agriculture and dairy have been among the very big red lines, where a high degree of caution has been exercised,” she said in the interview.
The finance minister pushed back against Mr Trump’s accusations that India was a “tariff king”, saying the label is “unjustified” and that India’s tariffs against the US were modest and within the World Trade Organisation’s guidelines.
“We have only eight duties, inclusive of zero tariffs. There have been drastic cuts in both the July and February budgets. The effective tariff rates are far below the WTO thresholds. So, for India to be called a ‘tariff king’ is absolutely unjustified,” she said.
A major sticking point in the India–US trade deal is agriculture, where deep structural differences persist.
The US wants greater access for its big-ticket farm exports like wheat, corn, cotton, and genetically modified (GM) crops to narrow its trade deficit, but India has resisted, citing the need to protect food security and the livelihoods of millions of small farmers.
Unlike the US, where large-scale, heavily subsidised farming is the norm, India’s agriculture is dominated by small landholdings and low productivity. High tariffs – up to 150 per cent – are used by India to shield its farmers from cheaper imports. The US argues these barriers are unfair, while India sees them as essential for survival.
After Mr Trump unveiled his Liberation Day tariffs, India acted swiftly by reducing tariffs on select US goods, including motorcycles and whiskey, and offered concessions in the agricultural and defence sectors in an effort to ease tensions with Washington.
The two countries have engaged in a series of high-level negotiations aimed at finalising a trade deal before the full impact of Trump’s new tariffs takes effect.
But progress has been slowed by political sensitivities in India, particularly around the farming and auto industries, which remain key domestic concerns.
According to Bloomberg, Indian negotiators in Washington have extended their stay to resolve these differences and reach a deal before the deadline.
People familiar with the matter said the negotiations that were supposed to run until 27 June were extended by a day, raising hopes of a timely trade deal.