India-US Trade Talks Hit Deadlock Over Dairy, Farm Demands; July 9 Tariff Deadline Looms
High-stakes trade negotiations between India and the United States in Washington have hit a deadlock over key demands related to the agriculture and dairy sectors, with just over a week left before a crucial tariff deadline. The Indian negotiating team has extended its stay in a last-ditch effort to break the impasse.
According to top government sources, India has categorically refused to provide market access for US dairy products, a “red line” drawn to protect the livelihoods of over 80 million people, many of whom are smallholder farmers. The talks, which began on June 26, have now stretched into their sixth day.
“There is no question of conceding on dairy. That’s a red line,” a senior government source told India Today, highlighting the sensitivity of the issue for India’s rural economy.
The Indian delegation, led by Special Secretary for Commerce Rajesh Agarwal, is trying to secure an interim trade pact that would avert the reinstatement of steep US tariffs. If a deal is not reached by July 9, an additional 26% reciprocal tariff imposed by the US on Indian goods—which was suspended for 90 days—will come back into force.
While India is seeking duty concessions for its labor-intensive sectors like textiles, leather goods, gems and jewellery, and certain agricultural products like shrimp and bananas, the US is pushing for concessions on its farm goods, including apples, tree nuts, and genetically modified (GM) crops, as well as industrial products, electric vehicles, and wines. India has remained firm in its opposition to allowing GM products, another major sticking point in the talks.
Despite the deadlock, the White House has struck a note of cautious optimism. Press Secretary Karoline Leavitt said on Monday that they are “finalizing these agreements, and you’ll hear from the President and his trade team very soon when it comes to India.”
The negotiations are running parallel to high-level diplomatic engagement, with External Affairs Minister S. Jaishankar also scheduled to meet his US counterpart, Marco Rubio, on the sidelines of a diplomatic meet. Both countries are aiming to eventually sign a broader bilateral trade agreement to more than double the current trade volume to $500 billion by 2030.
