According to reports, India and the United States are at a critical juncture in their trade negotiations, as talks over a mini trade deal remain stuck on contentious issues including agricultural market access, dairy imports, and genetically modified (GM) crops.
With a July 9 deadline fast approaching, the outcome has increased pressure on both sides to find common ground or face trade penalties.
The primary roadblocks in the ongoing discussions are the US’s demand for wider access to Indian markets for its agro-products, including dairy and GM crops. India has strongly resisted these demands, citing concerns over bio-safety, cultural sensitivities surrounding dairy production, and the protection of its agricultural sector. Indian officials have reiterated their unwillingness to compromise on sectors they consider sensitive and economically strategic.
Trade representatives from India, led by Special Secretary Rajesh Agrawal, arrived in the United States on June 27 for what was initially a 2-day dialogue. Due to a lack of consensus, the Indian delegation extended its stay till June 30 and may stay even longer if progress is made. This round of talks follows earlier discussions held in New Delhi from June 5 to 10.
Failure to conclude the mini trade deal would result in the United States imposing a 26% reciprocal tariff on Indian exports. Of this, a 10% base tariff has already been applied. Additional duties include sector-specific levies like 50% on steel and aluminium, and 25% on automobiles and parts. These duties stem from the US’s revived protectionist tariff strategy, initially mandated in April by President Donald Trump.
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India’s focus remains on reaching a balanced agreement that considers long-term strategic equity in trade relations. Officials emphasise the need for meaningful exemptions and a scaled-down version of the broader Bilateral Trade Agreement (BTA), especially before the steeper tariffs come into force from July 9. Yet, if the United States fails to soften its stance, India may walk away from the deal altogether.
As India-US mini trade talks reach a stalemate, key clashes over agriculture, dairy, and GM crop access continue to hinder agreement. With just days left before retaliatory tariffs kick in, both nations are faced with the challenge of making significant concessions or risking a breakdown in trade engagement. The next few days will be crucial in determining the trajectory of bilateral economic relations.
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Published on: Jul 1, 2025, 1:13 PM IST
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