India, US near mini trade deal, to exclude dairy, agriculture
What's the story
India and the US are on the verge of finalizing a mini trade deal. However, politically and economically sensitive sectors like dairy and agriculture are likely to be excluded from this agreement. An official told The Economic Times that, "The deal is in its conclusion phase," adding that issues related to agriculture may be discussed later. The announcement of the agreement could come within two days.
Agreement scope
Deal to cover trade in goods
The interim deal will only cover trade in goods, a second official said. The two countries may also finalize multiple agreements as issues get resolved. Both nations have been engaged in intense negotiations to finalize the deal before the US government's 90-day pause on reciprocal tariffs ends on July 9. India is pushing for better access to the US market for labor-intensive sectors like textiles and electronics.
Trade demands
US wants market access across sectors
On the other hand, the US wants market access across sectors and permission to export genetically modified crops and cattle feed to India. These are sensitive issues for New Delhi as local farmers mostly practice subsistence farming on small landholdings. Washington is not ready to reduce tariffs below the baseline 10%. In April, US President Donald Trump announced reciprocal tariffs for most trading partners based on their trade surpluses with America.
Tariff negotiations
Trump to send letters to countries
The US included a 26% levy on India in these tariffs. New Delhi wants this entire tariff to be rolled back. However, the US is pushing for market access across sectors, including agriculture and dairy products, along with insisting on exporting GM crops to India. Last week, Trump said his administration would send letters to countries that do not reach a deal by July 9 specifying the tariffs they would have to pay for exports to the US.