What’s at Stake in the Upcoming India-US Trade Negotiations?

Trade Talks Between India and the US: Key Considerations

New Delhi: The Global Trade Research Initiative (GTRI) emphasized on Friday that any trade agreement with the United States should be balanced and not politically motivated, ensuring the protection of India's farmers, digital landscape, and regulatory autonomy.

As India's chief trade negotiator is currently in Washington D.C., the upcoming days are crucial in deciding whether the two nations will agree on a limited interim deal or postpone discussions for the time being.

The goal is to finalize an interim trade agreement before July 9, coinciding with the expiration of US President Donald Trump's 90-day suspension of specific tariffs, which was initially announced on April 2.

Ajay Srivastava, the founder of GTRI, noted that a limited trade agreement resembling the recent US-UK mini trade deal is the most probable outcome. He stressed that any deal must prioritize the interests of Indian farmers and the country's digital ecosystem.

Under this interim arrangement, India is likely to reduce tariffs on various industrial products, including automobiles, which has been a consistent request from the US.

In the agricultural sector, India may provide limited market access by lowering tariffs and establishing tariff-rate quotas (TRQs) for select US goods such as ethanol, almonds, walnuts, apples, raisins, avocados, olive oil, spirits, and wine.

Additionally, the US is expected to urge India to make significant commercial purchases, including oil, LNG, civilian and military aircraft from Boeing, helicopters, and nuclear reactors.

There may also be calls for India to relax foreign direct investment (FDI) restrictions in multi-brand retail, which could benefit companies like Amazon and Walmart, as well as to ease regulations on remanufactured goods that currently face strict import standards.

It's noteworthy that agricultural products represent less than 5% of US exports to India.