Agriculture, tariffs, and trade barriers stall progress in high-stakes US-India deal talks
Deadlock Persists Over “Big, Beautiful” Trade Pact
With just days remaining before a July 9 deadline set by the US, the much-anticipated interim trade deal between India and the United States hangs in the balance. Despite public optimism from both sides, negotiators are locked in intense talks over key disagreements.
US President Donald Trump and Indian Prime Minister Narendra Modi earlier pledged a “big, beautiful” agreement to open markets and reduce trade friction. But deep divisions remain over agricultural access, tariffs on Indian steel, and India’s non-tariff import restrictions.
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Agricultural Access Emerges as Core Dispute
Agriculture has become the most sensitive issue in the ongoing talks. The US is pushing for access to India’s farm market for corn, soybeans, cotton, and other exports, while India is standing firm to protect domestic farmers.
“India will need to protect its agriculture sector for economic and political reasons,” said Richard Rossow of the Center for Strategic and International Studies.
India maintains that tariff reductions could undermine its minimum support prices (MSP) and food procurement systems—core policies affecting hundreds of millions of rural households.
Meanwhile, a Niti Aayog paper controversially recommends tariff cuts on key US farm exports like dairy, poultry, almonds, and genetically modified crops, though it remains unclear if this reflects official policy.
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Non-Tariff Barriers and Quality Control Rules
Another major flashpoint is India’s growing network of Quality Control Orders (QCOs), aimed at boosting local manufacturing and reducing low-quality imports. The US calls these rules restrictive and unpredictable, claiming they limit access for foreign goods.
“These import-quality regulations are a significant obstacle to market access,” said a former Indian trade official.
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What a “Mini-Deal” Might Look Like
Experts believe a scaled-down “mini-deal” remains the most likely outcome. This would mirror the recent US-UK agreement, focusing on:
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Tariff cuts on select industrial and agricultural products
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Limited quotas on items like ethanol, almonds, and wine
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Commitments on large US commercial sales (e.g., LNG, aircraft)
The broader issues—such as services trade, digital data rules, and IP protection—would be reserved for future talks.
“A mini-deal may sidestep politically sensitive topics and preserve negotiating room for a full FTA later,” says Ajay Srivastava, Global Trade Research Initiative.
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Is the ‘big, beautiful’ India-US trade deal in trouble?
Future Scenarios and Tariff Risks
If talks collapse, India may still avoid the harshest penalties. Experts say Trump is unlikely to reinstate the 26% tariff imposed during the April “Liberation Day” wave. A 10% baseline rate on Indian goods—already faced by over 50 nations—could be more likely.
However, Trump’s unpredictable trade posture leaves all options on the table.
“Targeting India while only the UK has reached a deal may appear unfair—still, with Trump, surprises can’t be ruled out,” warns Srivastava.
Visual Suggestions
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Infographic: Timeline of India-US trade negotiations
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Chart: Top trade items under dispute
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Map: Key export/import flows between US and India
