India and the US are locked in talks to finalize a scaled-down version of a Bilateral Trade Agreement (BTA) before July 9, when new US reciprocal tariffs—including a 16 percent levy on Indian goods—are due to kick in. However, the US’s decision to raise steel and aluminium tariffs to 50 percent, without exempting India, may derail these efforts .

Why the New Tariffs Create Roadblocks

The existing 90-day pause on country-specific tariffs ends July 8; now a 50 per cent universal tariff on steel and aluminium looms large .
A source notes the absence of an India-specific exemption, and uncertainty over a 10 per cent baseline tariff remains a key concern .

Important sentence: “Apart from the country-specific tariffs … the US has also imposed a 10 percent baseline tariff, which remains in place, on all imports.”

High Stakes for Indian Exporters

With July 9 approaching, many Indian exporters have delayed shipments, fearing new costs or tariffs that could hit their margins .
Additionally, India is reportedly exploring WTO action, even as it continues bilateral negotiations .

The Bigger Picture

The so-called “mini-deal” is a stepping stone toward a broader agreement aimed at doubling bilateral trade to $500 billion by 2030, originally agreed during PM Modi’s visit to Washington .
However, US demands—such as ** reciprocity on tariffs, agriculture, and autos**—remain sticking points .
India’s Steel Minister has downplayed the impact of the 50% tariffs, calling them a “minor” concern—but industry bodies warn of rising global input costs and re-routed cargo flows.

What’s Next

Talks have been extended into the following week, and negotiators are scrambling to meet the deadline.
The US may offer temporary exemptions (as it did for the UK), but India’s unique case remains unresolved .
India might continue parallel efforts, including WTO proceedings and pushing for exemptions in the wider trade dialogue .

Takeaway

The US’s doubling of steel/aluminium tariffs to 50 percent, without India-specific relief, challenges the feasibility of a July 8 mini-deal.
Exporters are cautious, shipments are paused, and trade talks have been extended.
India pursues both bilateral negotiations and global legal options, but uncertainty looms as deadlines near.