US deal: Why India must not trade under coercion

Deccan Herald

15-07-2025

India is in the midst of negotiations for a trade deal with the United States under an environment of unpredictability laced with unabashed and overt arm-twisting that has become the signature call of that nation under President Donald Trump. These are understandably difficult negotiations, and a lot is at stake given that the US remains one of India's most significant trade partners, reflected in the trade numbers and in deep ties seen through the lens of the large and vibrant Indian community in the US and the number of Indians who flock to the US for work, tourism, or to study. The US has extended the deadline for a trade deal from July 9 to August 1 under the threat of punitive tariffs of 26% if an agreement is not reached by then..The extension signals hope and optimism that a deal is possible, but it equally signals that the US side is pushing hard to see if India will bend under pressure. Another explanation is that the extension in itself is a case of 'TACO', or 'Trump Always Chickens Out', given that blanket tariffs on the rest of the world, as envisaged by the US, are not sustainable. But this is less likely with the dominant mood in Washington being to push hard, unmindful of the consequences, and India not being in a very strong position to dictate terms. Further, the US has extracted significant concessions from others, including the UK, and would demand that India, too, fall in line..Of course, the people of India would expect the country not to bend to anything unreasonable, even though making such demands has become the currency of the US. In this context, it is good to delink the success or failure of a trade deal with the performance or the influence of the Narendra Modi government. In other words, this government should ignore image management within the nation vis-a-vis the trade deal and take tough calls that protect Indian interests, even if this runs the risk of not having a trade deal. We may have a deal and be worse off as a nation if India allows concessions and gives in where it should not; we may equally not have a trade deal and be worse off in different ways because the tariffs will impact trade and hurt India and its exports..The latter will create disruption in the immediate, but it has chances of some mitigation with the US in a trade war against all that will likely bring some reversals over time, as its own economy will not be able to take the hit of tariffs beyond a point. Besides, this will be a signal to the world that India will not and should not be pushed. Having a trade deal by granting undue concessions can be far worse since it may open Indian markets in ways and to products and services that will have long-lasting impacts on the nation. The risks are many, but they will take their toll long after the deal is signed, so this is the space to be more watchful. Powerful US lobbies sitting close to, if not right within, the White House are at work pushing for what India will see as undue concessions..Concerns in dairy, agriculture sectors.In this context, two hot-button items that appear to have emerged are the US push for exports of GM crops and cow milk to India. None of these are new demands. They cannot be part of discussions if the Indian side makes it clear that no negotiations on these are possible. For example, India requires that dairy products used as food must be from animals that are not given blood meals or given feeds containing internal organs or tissues of ruminant or porcine origin. This is a perfectly fair and reasonable requirement – cows and buffaloes used for milk production are herbivores and must not be given any animal products as food..Further, milk in the Indian context is culturally sensitive, given that it is used for religious offerings and in sweets for auspicious occasions. Yet, the US position as articulated in the US' '2025 National Trade Estimate Report on Foreign Trade Barriers (FTB)' is that Indian requirements 'lack a discernible animal health or human health justification'. Such a sectoral opening up will kill the Indian dairy sector. It will mix up imported US milk that contains recombinant bovine growth hormone (rBGH), which has been approved in the US since 1993 to increase milk production in cows but is banned in the European Union and Canada. Drinking milk from these sources is linked to higher levels of IGF-1 in humans. IGF-1 is a growth hormone which, at high levels, is said to be linked to prostate, breast, colorectal, and other cancers though the linkage is not definitive, according to the American Cancer Society..On GM crops, the Alliance for Sustainable and Holistic Agriculture, or ASHA-Kisan Swaraj network, which brings together farmers and agriculturists, has written to the government appealing against any concessions to the US. In a letter, the alliance said: 'We strongly urge you to stand firm and unequivocally reject any such move, which would have serious and irreparable implications for India's agriculture, biosafety, public health, rural livelihoods, and seed and food sovereignty.'.The US wants much more than this. Take the example of stent prices, which were capped in India when the regulators found that price inflation was extremely high. Everyone made merry while patients suffered, till the caps came in. The US in the 2025 FTB report has argued that 'price controls (on coronary stents and knee implants) have not been increased in line with inflation and do not differentiate based on the cost of production or technological innovation, which dissuades US companies from serving the market.' The drift is clear. The US wants to extract, if not extort. India must resist..(The writer is a journalist and faculty member at SPJIMR; Syndicate: The Billion Press)