India-US Trade Deal Explained: Tariff Deadline, GM Crop Disputes And What’s At Stake | World News
New Delhi: As a trade storm brews across Asia, India is hoping to duck the full blow of America’s tariff blitz. But behind closed doors, negotiations are walking a tightrope and the stakes are massive.
While Vietnam, Laos, Myanmar and the Philippines have already taken direct hits from sweeping U.S. tariff hikes, some as high as 40 per cent, India has kept a backchannel open – scrambling to strike a deal that might cap duties on its exports at a more manageable 20 per cent or less.
Talks have been intense. A senior-level team from New Delhi is expected to fly back to Washington in the coming days – their third such mission in as many months. U.S. negotiators have already visited India twice this quarter. Both sides are trying to draft a joint framework that might soften the blow and leave space for further discussions.
The August 1 deadline now looms large. If talks fail, Indian exporters will lose their 90-day exemption window and get caught in the same tariff net tightening around much of Asia.
In private, Indian officials admit they are under pressure. With a $40 billion trade surplus with the United States, India was one of the first to be targeted by Donald Trump’s trade reset. Even now, the U.S. president is reportedly considering blanket tariffs of 15-20 per cent on most countries without preferential terms.
One U.S. official described the situation as “a race against time”. India, they say, might just get a softer landing if it accepts some tough compromises.
But that is exactly where things get murky.
Genetically Modified Seeds of Discord
Top of the list is the U.S. demand that India open its doors to genetically modified agricultural imports. The move has triggered an uproar across Indian farm unions, academic circles and even Parliament. Critics warn that if GM crops enter Indian markets, they could contaminate native varieties and potentially jeopardise future exports to countries that ban genetically altered food.
“It is a Trojan horse. Once it comes in, there is no going back,” said a senior agricultural scientist who advises the Indian government.
Dairy Demand Breaches Sacred Lines
The dairy issue is no less complicated. American cattle are often fed animal byproducts, a practice that violates Indian religious norms. Allowing such imports would cross a deeply sensitive line, one that India has repeatedly said it will not compromise on.
Costly Collateral Damage
Indian manufacturers are already feeling the pinch. Auto component exports, which make up nearly 28 per cent of India’s US-bound shipments, now face a 25 per cent tariff.
Credit agency ICRA estimates this alone could burn a Rs 9,000 crore hole in the sector. Then there is the 50 per cent levy on Indian steel and aluminium exports, jeopardising a $4.5 billion trade stream.
Digital Flashpoints and Data Fights
Beyond the factory floor, the digital battlefield is heating up. Washington wants India to loosen rules under its new Digital Personal Data Protection Act, which limits offshore data transfers.
It also seeks stronger intellectual property enforcement and market access for multi-brand retail – demands that could benefit U.S. tech and retail giants like Amazon and Walmart.
The Brics Factor and Political Chill
Geopolitics is adding fuel to the fire. Trump has publicly criticised BRICS, the global south bloc that includes India, China, Brazil, Russia and South Africa, calling it a threat to American financial dominance.
While he has said a trade pact with India is “within reach”, he has also warned of extra tariffs on all BRICS countries. A senior Indian negotiator summed it up, “This is a deal we cannot afford to rush, but also cannot afford to lose.”
Trade experts believe both sides may settle for a “mini-deal” that sidesteps the tougher issues, at least for now, while giving Trump a win to tout on the campaign trail.
But with Trump’s policy mood swinging like a pendulum, even the best-laid deals remain uncertain until the ink dries.
