US President Donald Trump has suggested a breakthrough in India-US trade talks, on multiple occasions in the last couple of months.
“There's one (trade deal) coming up, potentially with India. It's a very big one,” he said just a few weeks ago, promising to “unlock India” for American companies, with what he hinted could be a historic trade agreement.
But those claims aside, even with Trump's August 1st deadline to implement steeper reciprocal tariffs looming, no agreement between India and the US seems within reach. So what's holding up the handshake?
Initial hiccups within the US-India trade talks were related to agriculture and dairy products, the two sectors where India has long resisted foreign entry. The United States seeks freer market access to its farm and dairy products.
India has been cautious, citing protection for its farmers and large rural economy. The outcome? Negotiations were stuck.
Now, there's a new twist to the negotiations. According to a Business Standard report, The United States wants India to scrap all import duties on American products immediately after a deal has been signed.
That’s a big ask.
India's trade policy is generally more cautious. It prefers graduated reductions in duties. For example, in its free trade agreement with the United Kingdom, India will reduce tariffs on British goods such as auto and Scotch Whisky over several years, not right away.
What the US Wants?
What is India insisting on?
The stress is high. Trump's cutoff date of August 1st was to force action within trade talks. Without an agreement, he could possibly place new tariffs on Indian items, which could provoke a retaliatory measure from New Delhi. It's a game of hard-wired staring.
Will Trump ramp up pressure with tariffs or will 11th hour concessions be made by India?
Both sides are keeping their cards close to their chests.
There is still a small window left. But unless one side yields or backs down, there's a very real chance that even before it's even started, the US–India trade deal could stall.
The decision may recast trade ties between two of the world's largest economies. And impact industries from technology and pharmaceuticals to agriculture and internet trade.
