What will happen on August 1, when deadline for signing India-US trade deal ends? Will Donald Trump extend it as deal is not in sight?

The deadline for signing the India-US trade deal on August 1, 2025, is coming closer with no agreement in sight. Though the officials of the two countries have met many times and various issues have been sorted out, many more issues remain unresolved. US Trade Representative Jamieson Greer has made it clear that the trade deal may not be signed by the deadline when he said that 'more negotiations' were needed with India. What will happen now? Will US President Donald Trump extend the deadline for signing the trade deal? Will the tariff of 26% as announced earlier come into force on August 1, 2025? 

What happened on India-US BTA talks?

The two countries are working on a Bilateral Trade Agreement (BTA) like the India-UK FTA. However, as it will take much more time, it was decided that the two countries will sign a trade deal and agree on a mutually agreed tariff regime. The main stumbling block in the trade deal is access to the Indian farm sector and GM foods for the US.  While Washington is adamant on access to the Indian farm sector, New Delhi has flatly denied keeping in mind the interest of millions of farmers and the issue of food security. The difficulty can be gauged by the statement of Jamieson Greer, as he said, "They have expressed strong interest in opening portions of their market. We of course are willing to continue talking to them. But I think we need some more negotiations on that with our Indian friends to see how ambitious they want to be."

Stumbling blocks in India-US Trade Deal?

India wants greater access to the US market for its labour-intensive industries, which may create more jobs. New Delhi wants Washington to open sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas. On the other hand, the US wants duty concessions on goods from sectors like electric vehicles, petrochemicals, wines, dairy items, apples, tree nuts, and genetically modified crops.

What's next?

The other major sticky points are the steel and aluminium products, on which the US has imposed a tariff of 50%, and automotive parts, on which Donald Trump has imposed a tariff of 25% and has refused to budge so far. After announcing a 26% tariff on Indian products, Donald Trump announced a relief for 90 days. Before this deadline could end on July 9, the Trump administration set the new deadline as August 1. This deadline is most unlikely to be met. What will he do now? Will he extend the deadline one more time?