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US President Donald Trump on Tuesday (local time) said India and the United States are close to finalising a trade deal that will involve "much less tariffs," allowing both economies to better compete in the global market.

"I think we are going to have a deal with India. And that is going to be a different kind of a deal. It is going to be a deal where we are able to go in and compete. Right now, India does not accept anybody in. I think India is going to do that, and if they do that, we are going to have a deal for much less tariffs," Trump told reporters, according to ANI.

Also Read:Despite tariffs, India's engineering goods exports to US see 4.6% growth in May  

India and the US have been negotiating over a Bilateral Trade Agreement (BTA) before the crucial July 9 deadline of the 90-day pause on tariff escalations. The Indian delegation, led by Chief Negotiator Rajesh Agrawal, has extended its stay in Washington as both sides work urgently to finalise an interim deal.

The negotiations, originally scheduled for Thursday and Friday, have been extended. The two nations are working against the clock to prevent the automatic reimposition of 26 percent reciprocal tariffs. These were initially enforced during the Trump administration on April 2 and had been temporarily suspended.

Also Read: Trump-Modi chemistry strong, US-India trade pact announcement coming soon: White House

India has taken a firmer position on agricultural matters, which remain politically sensitive. Government sources say the sector, dominated by small-scale farmers with limited land holdings, makes agricultural concessions particularly challenging from both economic and political standpoints.

Notably, India has never opened its dairy sector to foreign competition in any previous free trade agreement. It remains reluctant to change that position even under pressure from Washington. The US is seeking reduced duties on key farm exports including apples, tree nuts, and genetically modified crops.

India, in return, is pushing for preferential access for its labour-intensive exports such as textiles, garments, gems and jewellery, leather goods and food products like shrimp, oilseeds, grapes and bananas.

Beyond the interim agreement, both countries are working towards a comprehensive BTA, with the first phase targeted for completion by fall 2024. The broader goal is to more than double the current bilateral trade volume of $191 billion to $500 billion by 2030.

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