Summary Points:
President Trump says US is “close” to a trade agreement with India amid new global tariff hikes.
Agriculture and dairy remain key sticking points, with India resisting US demands for greater access.
India seeks tariff concessions on exports like footwear and garments to support domestic employment.
Even as the United States moves ahead with new tariffs on several countries, President Donald Trump on Tuesday signalled that a trade agreement with India is within reach. Speaking at the White House, Trump stated that Washington is "close to making a deal with India," alongside recently finalised trade arrangements with the United Kingdom and China.
The President’s comments come as the US prepares to impose higher tariffs on key trade partners such as Bangladesh, Thailand, South Korea, and Japan, effective August 1. “We’re sending out letters to various countries telling them how much tariffs they have to pay,” Trump said, adding that adjustments could be made where justified, though the US would not act unfairly.
Behind the scenes, negotiators from both Washington and New Delhi are racing to finalise a so-called “mini trade deal” aimed at reducing tariffs and boosting bilateral trade. However, talks remain stalled over the US’s push to open India’s tightly guarded agricultural and dairy sectors—areas that have long been off-limits in India’s trade agreements due to their sensitive nature and importance to rural livelihoods.
India has resisted US demands to allow genetically modified (GM) crops into its market, citing risks to its farmers and food security. With nearly half of India’s 1.4 billion population dependent on agriculture for their livelihoods—despite the sector contributing just 16% to the GDP—cheap US imports could significantly impact local prices and farmer incomes.
India is also wary of setting a precedent that could pressure it to offer similar concessions to other trade partners.
On the other hand, New Delhi is pushing for tariff cuts on its labour-intensive exports like garments, leather goods, and footwear—key sectors for job creation. Indian negotiators have emphasised that without reciprocal tariff concessions, especially in high-employment sectors, any deal would fall short of the larger goal of doubling US-India trade to $500 billion by 2030.
As discussions continue, both sides are balancing political sensitivities and economic priorities in hopes of striking a mutually beneficial agreement.
(This story is published from a syndicated feed)