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Friday, March 6

A Clash of Giants: India and US at Odds Over Trade Access

Politics 2 Mins Read
India and US flags crossed over trade discussion backdrop

Trade negotiations between India and the United States have hit a roadblock as India’s Ministry of Commerce and Industry remains firm on limiting US access to its agriculture, dairy, and genetically modified (GM) crop markets. Ongoing discussions in Washington, DC, are at a crucial juncture as both sides try to avoid reciprocal tariffs set to begin from July 9, 2025.

Trade talks between India’s Ministry of Commerce and Industry and the Office of the United States Trade Representative (USTR) have hit a hurdle, with India refusing to grant broader access to its agriculture, dairy, and genetically modified (GM) crop sectors. The negotiations, currently underway in Washington, DC, are crucial as both nations aim to avoid reciprocal tariffs scheduled to take effect on July 9, 2025.

The Indian delegation, led by Special Secretary Rajesh Agrawal, arrived in Washington on June 27 and has already extended its stay until June 30, with potential for further extension depending on US flexibility.

Earlier, both countries held a round of discussions in New Delhi between June 5–10, aiming to hammer out a scaled-down Bilateral Trade Agreement (BTA) that could serve as the first step toward a broader economic partnership. However, India has taken a firm position against granting “sweeping entry” for US agricultural and dairy products.

“If America continues to press for these concessions, ongoing negotiations may collapse,” a government official stated, adding that India is weighing the possibility of extending talks only if the US softens its demands.

Should talks fail, Indian exports face up to 26% in reciprocal tariffs from the US. Of this, a 10% baseline duty is already in place, with an additional 50% sectoral levy on steel and aluminium and 25% on automobiles and auto parts also being considered.

India’s aim is to reach a compromise that prevents these duties and avoids escalation ahead of the July deadline. The mini deal is part of a broader trade strategy, with the full Bilateral Trade Agreement expected to be finalized by Fall 2025.

US President Donald Trump had initially announced targeted tariffs on April 2, 2025, before revising the policy on April 9 to impose a flat 10% duty on all imports.

Both sides remain engaged, with US officials also indicating their desire to finalize trade agreements with several countries, including India, in the coming months.

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