New Delhi [India], June 23 (ANI): With just two weeks remaining before the critical July 9 deadline, India and the United States face mounting challenges in finalising their Bilateral Trade Agreement (BTA) as the 90-day tariff pause nears expiration. Government sources have reiterated that India’s national interests are non-negotiable, even as both nations push for an interim deal to avoid a return to higher tariffs.
The ongoing negotiations have encountered significant roadblocks, particularly around US demands for lower duties on agricultural and dairy exports and expanded access for genetically modified (GMO) crops. India has firmly rejected these proposals, citing the need to protect food security, the environment, and the livelihoods of domestic farmers.
“India is unwilling to compromise on GMO crops or provide broad-based access for US agricultural and dairy products,” said a senior Indian official, who spoke on condition of anonymity. “Our position remains clear: any agreement must serve India’s strategic and economic interests first.”
The American side views India’s consumer market as vital for its agricultural sector and is pressing for reduced tariffs. However, Indian negotiators argue that opening up the market too much could undermine local agriculture and jeopardize national food systems.
Despite these fundamental differences, both sides remain committed to finding common ground before the July 9 deadline. The current tariff pause, implemented on April 10, temporarily halted additional duties and created space for negotiation. Without a deal by the deadline, tariffs will revert to April 2 levels, potentially reigniting trade tensions.
Government insiders suggest that even if talks stall, India could still maintain a competitive edge over other emerging manufacturing economies. Still, the return to higher tariffs would represent a setback in bilateral trade relations and could complicate broader economic cooperation.
Trade experts believe failure to reach an agreement may have wider implications for Indo-US relations, especially at a time when both nations seek to deepen economic ties amid shifting global trade dynamics. Negotiators are reportedly working around the clock to prevent a breakdown and are cautiously optimistic that a compromise can be reached — one that addresses US concerns without crossing India’s red lines.
As the deadline draws near, the trade negotiations have become one of the most closely watched developments in global commerce, with many watching to see whether diplomatic pragmatism can resolve the current impasse.
Adding to the discussion, a recent analysis by Crisil suggests that the BTA, if signed, would significantly boost US exports to India due to the latter’s comparatively higher tariff levels. The report states that India is likely to see increased imports in sectors such as energy, select agricultural items, and defense equipment.
According to Crisil, “This is because India’s tariffs are much higher than those of the US, and bringing these down would be advantageous to exporters in the US.” While India may benefit from imports like LNG, defense systems, and aircraft parts, the overall trade balance is expected to shift in favor of the US.
Crisil highlights that although India has shown reluctance in opening its market broadly to US agricultural products, select imports such as walnuts, pistachios, and cranberries — where India’s current share in US exports is relatively low — could see increased trade. In contrast, items like almonds, where India already accounts for over 70 per cent of US exports, may see less dramatic change.
Energy is seen as a major area of complementarity. India is one of the world’s largest energy importers, while the US is a leading exporter. Crisil notes a growing synergy in the LNG sector, with India securing long-term contracts with US suppliers. US natural gas prices are considered more stable than those in the Middle East, making American LNG a potentially more attractive import option for India.
Defence cooperation is another area where imports could rise under the BTA. Although India is focused on building indigenous defense capabilities, it remains one of the world’s largest arms importers. The US, being the largest arms exporter, is well-positioned to fill the gap left by a declining share of Russian defense exports to India. The 2023 launch of the INDUS-X defense collaboration platform underscores this growing cooperation.
Crisil also points out that while India may gain modestly in exports of smartphones, select pharmaceuticals, and labor-intensive goods such as textiles and gems, the overall increase in Indian exports to the US may be limited. Many of India’s key exports are already duty-free, and the Trump administration remains focused on reducing America’s trade deficit.
The 90-day pause on reciprocal tariffs, which began April 10, provided a crucial window for these negotiations. The base 10 per cent tariff, however, remains in effect. For India, the reciprocal tariff stands at 26 per cent — lower than that faced by many other Asian nations — yet still a pressure point in talks.
With the first phase of the trade deal targeted for completion by fall 2025, the coming days are critical. Both sides are under pressure to finalize an agreement that boosts bilateral trade without sacrificing core national priorities (ANI)
829 words, 4 minutes read time.
About The Author
