US-India Trade Agreement Nearing Completion, Says White House

In what could mark a major milestone in Indo-US economic ties, the White House on Monday reaffirmed India’s status as a “strategic ally” in the Indo-Pacific and hinted at an imminent announcement on a long-anticipated trade agreement between the two nations.

White House Press Secretary Karoline Leavitt, addressing the media, revealed that discussions around a trade pact between India and the United States are in their final stages. “They are finalising these agreements, and you’ll hear from the President and his trade team very soon,” she said, echoing President Donald Trump’s earlier remarks about a potential “very big deal” with India.

Leavitt also underlined the “very good” relationship between Prime Minister Narendra Modi and President Trump, further fuelling speculation that both leaders may be aiming for a diplomatic and economic breakthrough ahead of the US elections.

Tough Talks Behind Closed Doors

The momentum comes at a critical time as an Indian delegation, led by Special Secretary in the Department of Commerce Rajesh Agrawal, extended its stay in Washington by three days for further negotiations. Initially scheduled to conclude on June 28, the talks will now continue until July 1, indicating both urgency and complexity in sealing the deal.

According to official sources, the discussions are centred around an interim trade pact, which both sides are pushing to finalise before July 9—the deadline marking the end of the 90-day suspension of a 26% reciprocal tariff the Trump administration had imposed on Indian goods on April 2.

While the US temporarily halted the punitive tariffs, the baseline 10% tariff remains. India, on its part, is negotiating hard for a complete rollback of the 26% surcharge—viewing it as essential to restoring fair trade terms.

Flashpoints: Dairy, Agriculture & Market Access

The negotiations are anything but smooth. Agriculture and dairy remain thorny issues. India has consistently resisted opening its dairy market in any of its previous free trade pacts—and this time is no different. The US, on the other hand, is pushing for greater access in these sectors as well as the removal of trade barriers.

President Trump recently stated that the US is looking for “full trade barrier dropping” and enhanced market access in India, though he conceded that achieving this may not be easy.

Commerce Secretary Howard Lutnick has also indicated that a breakthrough is within reach. Earlier in June, he expressed confidence that the agreement could be concluded “very soon,” feeding speculation that Washington is equally eager to finalise terms before the July 9 tariff expiry.

Strategic Stakes in the Indo-Pacific

Beyond trade, the developments underscore deepening strategic ties between Washington and New Delhi. Responding to questions on China’s influence in the Indo-Pacific, Leavitt reiterated, “India remains a very strategic ally in the Asia Pacific,” suggesting that economic cooperation is being shaped by geopolitical considerations as well.

With the US increasingly viewing India as a counterbalance to China’s regional assertiveness, the trade deal could serve as both an economic and strategic statement.

Deal Before the Fall?

Insiders believe the interim deal could serve as a precursor to a broader Bilateral Trade Agreement (BTA), which the two sides are aiming to conclude by the fall of this year (September–October).

The goal? Doubling the bilateral trade volume from the current USD 191 billion to a staggering USD 500 billion by 2030.

A Calculated Gamble

If a deal is announced in the coming days, it would be a diplomatic win for both Trump and Modi, each facing their own domestic political dynamics. For Trump, it adds to his campaign narrative on international deal-making. For India, it brings potential tariff relief and better access to the US market—without compromising too much on sensitive sectors.

Yet, whether the two governments can reconcile their differences on tariffs and dairy remains to be seen. One thing is clear: all eyes will be on Washington and New Delhi in the days ahead as the deadline looms.

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