India has drawn a red line in ongoing trade talks with Washington, insisting that the US remove 25% additional tariffs before any bilateral trade agreement (BTA) can move forward. Negotiations, which began in March, have seen five rounds completed, though the sixth was delayed after the US side postponed its August 25 visit.
Sources say New Delhi’s top concern is safeguarding its farmers and small businesses, with Prime Minister Narendra Modi reiterating that agricultural interests will not be compromised. The US, meanwhile, is demanding tariff reductions on corn, soybeans, almonds, apples, ethanol, and expanded access for dairy exports.
A Commerce Ministry official highlighted that India’s export exposure to US tariffs could affect 1–1.5% of GDP. However, domestic demand growth and GST reforms may offset losses. “Short-term incentives can only provide limited relief. Structural reforms will yield longer-term benefits,” the official noted.
The proposed deal aims to more than double India-US trade to $500 billion by 2030 from $191 billion at present. Both governments are targeting the fall of 2025 for the first phase of the BTA, but tariff disagreements remain a major hurdle.