New Delhi, June 30 -- India and the US are negotiating an interim deal within the legally binding framework of a bilateral trade agreement (BTA) unlike the non-binding nature of the recently concluded US-UK Economic Prosperity Deal (EPD), hence New Delhi wants Washington to simultaneously withdraw all punitive tariffs, including the 26% retaliatory levies, people in the know said. The two partners are intensely engaged in finalising an early harvest deal before July 9 that primarily involves tariff and non-tariff matters as per mutually agreed terms of reference (TORs) in March 2025. The TORs reinforce the binding nature of the deal that will eventually culminate into a comprehensive free trade agreement or BTA, they said, requesting anonymity. US negotiators have been suggesting India replicate the US-UK EPD model, where Britain on May 8 accepted continued 10% baseline tariffs on most goods while securing relief from additional sectoral tariffs. The deal is, however, not legally binding in contrast to the proposed India-US BTA. India is willing to slash tariffs on over 90% of US imports, but it wants Washington to simultaneously repeal the 10% baseline tariff imposed on Indian products from April 5, withdraw the threat to levy another 16% country-specific duty (total 26%) from July 9, and revoke safeguard duties on steel, aluminium, automobiles and components. "PM Narendra Modi and President Donald Trump on February 13 envisioned that the proposed BTA would deepen the US-India trade relationship ensuring 'fairness, national security and job creation' aiming to more than double total bilateral trade to $500 billion by 2030. This leaves no doubt that the two partners are intensely negotiating an interim deal, which is part of a larger and legally binding BTA," one of them said. Experts said the negotiations between India and the US are happening under the 'bilateral trade agreement' framework and, therefore, cannot be equated with the non-binding 'deal' that contains best endeavour clauses for implementation or negotiations in the future. The Indo-US early harvest pact will be binding and immediate, hence reciprocity is the key, they said. "Ideally, if India offers to reduce its MFN tariffs, the US should reciprocally withdraw the entire quantum of tariffs it imposes on Indian exports. This would mean both the MFN and 'Liberation Day' reciprocal tariffs and the safeguard duties on steel and aluminium," said Agneshwar Sen, trade policy leader at consultancy firm EY India. "Since, negotiations and a formal agreement on MFN duties will involve a lengthy legislative process involving the US Congress, we may expect that the tariffs imposed through Executive Orders, namely the reciprocal tariffs and safeguard duties to be reduced or withdrawn immediately, with agreement on an extended timeline for the rest. Even otherwise, MFN tariffs in the US, on an average, are already low with low adverse impact particularly if competing exports from third countries do not receive any exemptions," he said....