India–US trade deal hits rough patch days before 26% tariff deadline
India's proposed trade deal with the US has run into rough weather with Indian authorities resisting the insistence of their counterparts to allow lower-duty import of American agricultural products such as maize and soybean, fearing adverse impact on farmers and health concerns related to
genetically modified food
, according to ToI.
Sources told ToI that the talks have hit a hurdle. In the absence of a limited deal ahead of the July 9 deadline, domestic industry will have to brace for a 26% levy, especially with a view within the government that what the Trump administration is offering in the form of a 10% baseline tariff, applicable to all countries, is not good enough.
At the start of the negotiations, the government was hoping to get zero duty access for several products of India's interests, including textiles, leather goods, pharmaceuticals as well as some engineering goods and auto parts.
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American negotiators, who are keen that the deal be finalised, have indicated to their Indian counterparts that the Trump administration cannot go down to zero tariffs immediately. In any case, India has sought immunity from future tariff actions once a deal is in place.
Unhappiness in India over US President
Donald Trump
's claim—since rejected by Prime Minister Narendra Modi—of having brokered the ceasefire in
Operation Sindoor
, has also not helped in creating a conducive atmosphere for resolution of trade-related issues, ToI noted.
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Earlier this month, Bloomberg had also reported citing people familiar with the matter that trade officials from India and the US have hardened their stance on some key issues as they race to conclude an interim deal before higher US tariffs take effect in July.
Negotiators from both sides, who met in New Delhi this month, wrangled over issues including a US demand that India open up its market to genetically modified crops, officials in New Delhi had said, asking not to be identified as the discussions are private.
The US also wants India to eliminate tariffs and ease price controls on medical devices, and relax rules on data localization policy, which mandates storage of data on local servers, they added.
US President Donald Trump has launched investigations in the pharmaceuticals sector under Section 232 of the Trade Expansion Act, a precursor to higher tariffs. He had used the Section 232 probes, which looks at the national-security implications of imports in critical sectors, to impose tariffs on steel, aluminium and automobiles and its components.
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A US trade team led by Brendan Lynch, assistant US Trade Representative, met officials in New Delhi on June 5–10, with both sides agreeing to expedite talks to conclude an agreement that includes 'early wins,' Indian officials said earlier this week.
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