India-US trade talks reportedly extended amid tariff standoff ahead of July deadline

India approved a licence for Elon Musk’s Starlink to launch commercial operations, ignoring his public spat with Trump

Trade negotiations between India and the United States have been extended into next week, as both sides push to resolve key differences over tariff reductions in the agriculture and automobile sectors, Reuters reported citing Indian government sources.

A U.S. delegation led by senior officials from the Office of the United States Trade Representative (USTR) held two days of discussions in New Delhi with Indian trade officials, led by India’s chief negotiator Rajesh Agrawal. Negotiators had initially aimed to wrap up talks by Friday, but will now continue discussions on Monday and Tuesday, one of the officials told Reuters.

“The two countries are actively engaged in focused discussions to facilitate greater market access, reduce tariff and non-tariff barriers, enhance supply chain resilience and integration,” said an Indian official with direct knowledge of the talks, according to Reuters.

The talks are part of efforts to reach an interim trade agreement before a July 9 deadline, following a February commitment between U.S. President Donald Trump and Indian Prime Minister Narendra Modi to conclude a bilateral trade pact by fall 2025 and double bilateral trade to $500 billion by 2030.

A second Indian official told Reuters that both sides are negotiating a limited trade deal that could pave the way for the Trump administration to revoke 26 percent reciprocal tariffs on Indian goods. These tariffs had been paused for 90 days, along with duties on imports from several other U.S. trading partners.

“Many Indian exporters have held back shipments to the U.S. in the last two weeks, fearing cargos may not reach before the July 9 deadline,” the official added.

India’s exports to the U.S. surged nearly 28 percent year-on-year to $37.7 billion during January to April 2025, largely due to front-loading of shipments ahead of anticipated tariff hikes in April. Imports from the U.S. rose to $14.4 billion in the same period, widening the trade surplus in India’s favour, according to U.S. government data.

Meanwhile, India has resisted U.S. demands to open up its agricultural and dairy markets, citing the threat to millions of small and poor farmers who would struggle to compete with subsidised American produce, another Indian official told Reuters.

India has also warned that while it is committed to bilateral engagement, it reserves the right to pursue its case at the World Trade Organisation (WTO) against U.S. tariffs on steel and aluminium.

In a related development, India has granted a licence to Elon Musk’s Starlink to launch commercial operations in the country, according to Reuters, despite Musk’s recent public spat with President Trump.