US-India talks hit a critical point as Trump pressures global trade partners but India stands firm on protecting farmers, jobs, and fair access.

Quick Summary

• Trumps new tariff wave targets 14 countries including Japan, South Korea, and Thailand.
  
  

• Talks with India are close to done, but big issues like agriculture and dairy remain unsolved.
  
  

• India wants better US market access for footwear, garments, and leather.
  
  

A deal is unlikely unless both sides agree on mutual tariff cuts that benefit core sectors.

What Just Happened?

On July 8, 2025, US President Donald Trump announced sweeping tariffs on 14 countries, including key Asian partners. But in the same breath, he claimed the US was close to making a deal with India.
While other nations are being hit with new duty hikes, India remains at the negotiation table but its not giving in easily.

Were close to making a deal with India... Others, we dont think well be able to, Trump said at a White House press event.

But heres the catch:

India isnt ready to accept any deal that:

• Opens up its dairy and agriculture markets to US imports
  
  

• Ignores reciprocal tariff cuts on Indian exports like textiles, footwear, and leather
  
  

Trumps Tariff Tactic: A Global Squeeze

Trumps strategy is clear: reward countries that sign deals, and penalize those that dont. Countries like Bangladesh, Japan, South Korea, and Thailand now face steep new tariffs starting August 1.

This is classic Trump trade playbook use tariffs as leverage.

Trumps message: Sign a trade deal, or pay the price.

Indias Red Lines: Agriculture, Dairy, and GM Crops

Despite US pressure, India isnt ready to compromise on key domestic sectors:

1. Dairy Market Access

The US wants Indian markets opened to American dairy products, including those from genetically modified cattle.
India says no and for good reason:

• Most dairy in India comes from small farmers
  
  

• Allowing US imports could collapse local prices and hurt rural incomes
  
  

• Food safety standards and religious sensitivities are also big factors
  
  

2. Agricultural Imports

India has consistently excluded agriculture from Free Trade Agreements (FTAs), including with ASEAN, the UK, and the EU.
Opening this sector to the US would mean doing the same with others a move India sees as risky and unfair.

3. GM Crops & Food Sovereignty

US negotiators are pushing for India to allow genetically modified (GM) food products.
But India views this as a threat to both food safety and seed sovereignty an issue farmers groups have repeatedly protested.

Indias Ask: Give Us Fair Access for Job-Creating Exports

India is pushing hard to get better access to the US market for its labour-intensive sectors, including:

These sectors are critical for employment, especially for semi-skilled workers and women in urban and peri-urban areas.

India wants:

• Tariff reductions or eliminations on these products
  
  

• Removal of non-tariff barriers (like certification red tape)
  
  

• Long-term export guarantees for predictability
  
  

Whats Actually on the Table?

Negotiators are reportedly narrowing the deal to a mini trade agreement focused on reciprocal tariff cuts, not a full FTA.

Likely Deal Areas:

• Cut in tariffs on select US manufacturing goods

• Better market access for Indian textiles & footwear

• Easier licensing for US tech firms

• Streamlining of customs procedures

• No agreement yet on agriculture or GM foods

• Services and digital trade mostly left out

Why This Deal Matters

The goal from both sides is clear:
Double bilateral trade to $500 billion by 2030 (currently around $200 billion).

But without a solid deal:

• Indian exporters will struggle with high US duties
  
  

• US companies will lose access to Indias growing middle class market
  
  

• Political tensions could rise especially if tariffs extend to India later
  
  

Without tariff relief on job-creating goods, India sees little benefit in signing the deal, said a former Indian trade negotiator to NDTV Profit.

Indias Balancing Act: Jobs vs. Pressure

India is playing a calculated game:

• Stay open to talks, but dont compromise on rural livelihoods
  
  

• Negotiate tariff access where it helps job growth
  
  

• Use time and diplomacy to reduce long-term exposure to US pressure
  
  

And theres another angle:

Giving in to US demands on agriculture might force Indias hand with other trade partners, like the EU or Australia, who would demand the same access.

Domestic Politics: Why India Cant Give In Easily

Agriculture may be just 16% of GDP but it supports half the population.
In a country where elections are always near, any move that affects farmers can trigger protests, political backlash, or even coalition risks.

No Indian government, especially in an election year, can afford to be seen as selling out farmers for a trade deal.

Key Takeaways

• Trump is using tariffs as a negotiating weapon in global trade India is resisting, but still talking.
  
  

• India is standing firm on protecting farmers, banning GM crops, and preserving food safety.
  
  

• A mini deal focused on textiles, footwear, and reciprocal tariff cuts could happen but not without concessions on both sides.
  
  

• The outcome of the US elections may change the trade dynamics entirely India is watching carefully.
  
  

What Should Indian Businesses and Exporters Watch For?

Final Word

This isnt just a story about Trumps tariffs.
Its a bigger battle over fair trade, domestic priorities, and global power equations.

India may be close to a deal but not at any cost.
The next few weeks will test how well India can hold its ground while keeping doors open.

Read also: Vietnams 20% US Tariff Shock: What It Means for Indias Trade Strategy