Inside the US-India trade talks: any breakthrough on aluminium and steel tariffs?

Now, with the deadline fast approaching, the interim trade talks carry the weight of a possible breakthrough or another bitter twist in the tariff saga. Will diplomacy win the day, or are we bracing for yet another escalation masked as negotiation? Well, as of now, the interim trade talk has shaped up something like this:

• 50 per cent tariff on aluminium and steel and 25 per cent duty on automobiles remain in place
• India has drawn red lines by taking firm stand on crucial sectors including agriculture and dairy.
• Trump has threatened any BRICS countries (Brazil, Russia, India, China, and South Africa) go against the US trade policies will be charged an additional 10 per cent tariff.
• India awaits clarity on whether a trade agreement with Washington can be reached before the US President’s tariff deadline.
• The implementation of reciprocal tariffs will take effect from August 1, 2025.

Also read: India warns of retaliatory tariffs if US doubles aluminium and steel duties

For a moment, it looked like the US-India trade deal was within reach. But just as the negotiations appeared to gain traction, the conversation hit a r roadblock: agriculture. Donald Trump, ever the dealmaker, had his eyes set on exporting American corn and soybean to India. But given the agricultural sector a sensitive area, the Indian government drew a clear red line.

Commerce Minister Piyush Goyal made it clear that India’s approach to trade isn’t dictated by timelines or pressure. “Not deadline-driven,” he emphasised,  signalling that national interests won’t be traded at the negotiating table, even if the clock is ticking towards the July 9 deadline.

India may want a deal—but it won’t settle for one at any cost. The message to Washington? We’re committed to dialogue, not desperation.

India also said this mini trade deal would not be enough for the US-India ambitious trade goal of USD 500 billion by 2030.

Just when it seemed the clock had run out, Donald Trump threw in a curveball—extending the deadline for reciprocal tariffs from July 9 to August 1. On paper, it signals movement toward a US-India trade pact. In reality, it's a tactical pause, not a breakthrough.

While Indian exporters may find momentary relief in the extension, the reprieve is cosmetic. The punitive tariffs—50 per cent on aluminium and 50 per cent on steel—remain intact. Official sources confirm these duties are off the negotiation table for now, meaning the so-called "deal" offers more time, not more hope.

Trade analysts have explained India having limited export exposure to the United States in aluminium and steel but still facing the hefty tariffs indicate Trump’s protectionist stance and leaves no room for near-term relief. The USGS data showed India’s aluminium exports to the US in Q1 2025 were 43,300 tonnes, accounting for 2.7 per cent of the latter’s total Q1 imports.

What’s more telling is that India hasn’t yet received the formal communication of reciprocal tariff extension that 14 other countries have, including Bangladesh, Indonesia, Japan, and South Korea.

Also read: India assesses potential $4.6 billion export hit from US 50% aluminium and steel tariff—how real is the threat?

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