“Big, Beautiful” India-Is the US trade deal out of reach?
There are only a few days before the July 9 deadline set by U.S. President Donald Trump’s administration, hopes of establishing a temporary trade agreement between Delhi and Washington remain alive, but increasingly entangled in difficult bargains.
Despite the White House Press Secretary Karoline Leavitt Indicating that the deal is coming, Indian Finance Minister Nirmala Sitharaman’s optimism asserts that Delhi will welcome a “big, good, beautiful” deal – in response to Trump’s statement that a trade deal with Trump is coming and will “open” the Indian market – negotiators remain locked in amid tough discussions.
Key sticky points persist, especially in agricultural access, automotive components on Indian steel and tariffs.
Indian trade officials have extended a round of talks for their stay in Washington, even if Delhi signal “Very big red line” In terms of farm and dairy protection, the United States will open to a wider market. The tone remains optimistic – but the window to reach a deal seems to be narrowing.
“The next seven days will determine whether India and the United States want to get a limited ‘mini deal’ or stay away from the negotiation table – at least so far,” said Ajay Srivastava, a former Indian trade official at the Delhi-based think tank Global Trade Research Program (GTRI).
This uncertainty depends on some key flash points – nothing is more controversial than agriculture.
“Conclusion The initial agreement faces two real challenges. The first is the U.S. entry into India’s basic agricultural products market. India will need to protect its basic agricultural sector for economic and political reasons,” Richard Rossow, who conducted the Indian economy at the Center for Strategic and International Studies in Washington, told the BBC.
Washington has been pushing for a greater opportunity to enter India’s agricultural sector for years, viewing it as a major untapped market. But India has Strongly protect itinvokes the food security, livelihoods and interests of millions of small farmers.
“The second issue is India’s non-advocacy barriers. India’s growing issues such as ‘Quality Control Orders’ (QCO) are major obstacles to the U.S. market access and it can be tricky to handle meaningfully in a trade agreement”.
The United States raises concerns about the so-called growing and heavy import quality rules of India. More than 700 QCOs – part of the “self-reliance” drive – aimed at curbing low-quality imports and promoting domestic manufacturing. Suman Berry, a senior member of government think tank Niti Aayog, also called the rules “vicious intervention” that restricts imports and raises costs for small and medium-sized industries in the country.
The elephant in the room is the farm exit. India – U.S. farm trade remains modest $8 billion, India exports rice, shrimp and spices, and the United States sends nuts, apples and lentils. But as trade talks progress, Washington is focusing on larger farm exports — corn, soybeans, cotton and corn — to help narrow the $45 billion trade deficit with India.
Experts worry that tariff benefits may urge India to weaken its minimum support price (MSP) and public procurement – by ensuring fair prices and stable crop purchases, thus keeping farmers from critical protections from price collapse.
“In the dangers of dairy or critical food cereals such as rice and wheat, neither dairy nor wheat will cut tariffs. These categories are politically and economically sensitive to more than 700 million people in the rural economy of India,” Mr Srivastava said.
Strangely, a recent Niti Aayog paper suggests that it includes rice, dairy, poultry, corn, apple, almond and GM soybeans, including rice, dairy, poultry, corn, apple, almond and GM soybeans, according to the proposed India-US Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade Agreement (India-US) Trade However, it is not clear whether the proposal reflects official government thinking or whether it remains a policy recommendation on paper.
“If the United States says ‘no deal’, if India does not include access to basic agriculture, then obviously, the expectations of the United States cannot be set correctly. Any Democratic-elected government will have political restrictions on business policy choices,” Mr Rosso said.
So what transactions may be there now?
Experts like Mr. Srivastava believe that the “more likely outcome is a limited trade agreement”, which was designed after the US-UK MINI trade agreement announced on May 8.
Under the proposed deal, India could cut tariffs on a range of industrial supplies – including automobiles, long-standing U.S. demand – and provide limited agricultural access through tariff cuts and quotas, and offers selected products such as ethanol, almonds, walnuts, apples, apples, raisins, glucose, avocados, olive oil, olive oil, spirits, and wine.
In addition to cutting tariffs, the U.S. may also push India to buy large-scale commercial purchases – from oil and liquefied natural gas to Boeings, helicopters and nuclear reactors. Washington may also seek FDI in multi-brand retail, benefiting companies like Amazon and Walmart and making easy regulations on rebuilding goods.
“So, if drawn, this ‘mini deal’ will focus on lowering tariffs and strategic commitments, leaving behind a wider FTA issue – including trade in services, intellectual property rights (IP) rights and digital regulations – for future negotiations.”
Initially, India-U.S. trade negotiations seemed to be based on a clear and fair vision.
“The two leaders (Trump and Modi) proposed a simple concept at the first summit of this year. The United States will focus on capital-intensive manufacturing of goods, while India will focus on labor-intensive projects,” Mr Rosso said. But things seem to have changed since then.
Experts believe that if negotiations fail, Trump is unlikely to restore India’s 26% tariffs.
Although 57 countries faced these taxes in April, so far, only the UK has reached a deal. It seems unfair to target India specifically. “Nevertheless, it is impossible to rule out surprises with Trump,” Mr. Srivastava said.
