India has offered “deep” cuts to its import tariffs on a swath of goods in talks with the US, but is seeking to retain its high levies on sensitive agricultural commodities such as foodgrains and dairy products, according to two people with knowledge of the negotiations.

The government of Prime Minister Narendra Modi is racing to secure a preliminary trade agreement with the US to forestall President Donald Trump’s threatened imposition of a 26 per cent “reciprocal tariff” on all Indian goods from July 9. 

“There is a possibility of a very deep tariff reduction from India under the bilateral trade agreement,” said one of the people familiar with India’s stance on the talks, who asked not to be identified because they were confidential. “But this is subject to a very balanced outcome for both sides.”