India, US trade talks hit hurdle on Trump tariffs, GM crops
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, people familiar with the matter said.
Negotiators from both sides, who met in New Delhi this week, wrangled over issues including a US demand that India open up its market to
genetically-modified crops
, officials in New Delhi 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, the people said.
New Delhi is pushing for the US to exempt India from existing sectoral tariffs on steel and automobiles, and threatened reciprocal tariffs that are scheduled to kick in on July 9, the people said. India also wants to be exempted from proposed duties on pharmaceuticals, they said.
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, aluminum and automobiles and its components.
India's Ministry of Commerce and Industry didn't immediately respond to an email seeking information.
Trade analysts say the toughening in stance on both sides may not derail the deal, but will certainly prolong the negotiations. India also appears to be giving up more on tariffs than the US, according to Ajay Srivastava, founder of the New Delhi-based think tank Global Trade Research Initiative. India is cutting its most-favored nation tariffs, while the US hasn't offered to do the same, and is also insisting on the 10% baseline tariff remains for all nations.
'India should enter a deal only when it is balanced,' Srivastava said. 'A small deal is very much possible, but there shouldn't be pressure as India doesn't have much to lose even if the deadline is missed.'
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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Prime Minister
Narendra Modi
, who is scheduled to head to the
Group of Seven
summit in Canada in coming days, may also have an opportunity to advance the trade talks with Trump while there.
India and the US are working on a phased trade deal with an early agreement targeted for July.
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