The White House has exuded confidence about the ongoing trade talks with “strategic ally” India and said that a deal is very close.

New Delhi, however, put its foot down on offering market access in sensitive agricultural and dairy products, a key demand of the US, and is insistent on not budging on it despite the July 9 reciprocal tariff deadline, sources said.

“The President said last week [that the US and India are very close to a trade deal], and it remains true. I just spoke to our Secretary of Commerce about it. He was in the Oval Office with the President. They are finalising these agreements, and you’ll hear from the President and his trade team very soon when it comes to India,” White House Press Secretary Katherine Leavitt said at a briefing on Monday.

Trade teams from India and the US are locked in negotiations in Washington DC for the past five days trying to get an agreement on an interim trade pact by July 9.

The absence of a deal in a week’s time might result in full imposition of the reciprocal tariffs announced by US President Donald Trump on trade partners on April 2, fixed at 26 per cent for India. Trump had put the reciprocal tariffs on a 90-day hold (except a 10 per cent baseline tariff), and the period would lapse on July 9.

At the briefing, Leavitt expressed optimism about India’s relationship with the US. “India remains a very strategic ally in the Asia Pacific, and the President has a very good relationship with Prime Minister Modi — and he will continue to have that.”

But if US demand for market access in the agriculture sector, including for dairy products and GM crops, is not withdrawn, then a deal seems difficult by July 9, a source tracking the development said.

“It is not possible for India to open up sectors sensitive to food security such as rice and wheat. Neither can it put its vulnerable dairy farmers at risk by making offers for dairy products. Also US demand for market access for soya and corn is difficult to meet as they are mostly GM crops. One has to see if the US respects these redlines and a deal can emerge,” the source said.

US Treasury Secretary Scott Bessent on Monday warned that if negotiating countries stay “recalcitrant” in trade talks, reciprocal tariffs could return to April 2 levels.

Published on July 1, 2025