India is moving swiftly toward finalizing an interim trade agreement with the United States, potentially before July 9, 2025. According to government officials, the ongoing bilateral trade talks are on track and are expected to result in a comprehensive deal by fall this year. This development comes as India’s trade deficit narrowed significantly in May, dropping to $21.88 billion due to a seasonal upswing in exports and a decline in imports.
Despite high tariffs imposed under US President Donald Trump’s administration, Indian exports to the US saw notable growth. In the April-May period, exports reached $17.25 billion — up from $14.17 billion during the same timeframe last year. Analysts attribute the growth, in part, to Indian exporters front-loading shipments to avoid uncertainty stemming from the temporary 90-day suspension of reciprocal tariffs, which includes a steep 26% duty on Indian goods until July 9.
A trade ministry official stated that both nations are committed to signing the interim pact by the deadline. However, they noted that the long-standing goal of doubling bilateral trade would remain out of reach without a reduction in tariffs on both sides.
Meanwhile, Prime Minister Narendra Modi has set sights on another major trade milestone. During his visit to Cyprus — ahead of the island nation’s EU presidency in 2026 — Modi announced that India expects to finalize a free trade agreement with the European Union by the end of this year. He emphasized the tremendous potential in expanding economic cooperation with Cyprus and the broader European region.
In a joint statement with Cypriot President Nikos Christodoulides, Modi reiterated the significance of the India-Middle East-Europe Economic Corridor, stating it would foster lasting regional peace and prosperity. Christodoulides, in turn, affirmed that deepening ties with India would be a key focus of Cyprus’s EU leadership.
These parallel trade negotiations underscore India’s renewed emphasis on expanding global trade partnerships and securing strategic economic alliances across continents.
