Deal Or Deceit? US Pressures India To Open Farms – Is Washington Pushing A One-Sided Trade Trap?

India.com

3 days ago

New Delhi: The clock is ticking. Only a few days left before the July 9 deadline set by U.S. President Donald Trump. Hopes of a limited trade deal between India and the United States still linger. But the mood around the negotiating table feels anything but settled.
The White House has publicly hinted that the deal is all but done. In New Delhi, officials have echoed a similar sentiment, calling the potential agreement 'big, good and beautiful'. Trump claimed it would open Indian markets to American goods. But behind closed doors, things remain tangled in tough back-and-forth.
Key concerns have refused to budge. Agriculture, auto parts and steel tariffs continue to dominate the conversation. Indian negotiators have extended their stay for another round of talks. On the other side, India has made it clear that there will be no compromise on protecting farmers and dairy producers. The United States, however, keeps pushing for greater access.
Time is running out. Optimism hangs in the air, but so does doubt.
Experts tracking the talks believe the coming week could bring clarity. Either a small deal materialises or both sides walk away. At least for now.
Agriculture remains the biggest sticking point. The United States wants access for corn, soybean and cotton. India resists. Food security and the livelihood of small farmers weigh heavily on the Indian side. Experts say India is unwilling to slash support prices or reduce public procurement. These programmes offer a safety net to millions of rural families.
No cuts expected on rice, wheat or dairy tariffs. These sectors carry political risk. Over 700 million people depend on them, directly or indirectly. Rural India cannot afford shocks.
A policy paper by a government think tank recently recommended tariff reductions on several U.S. agricultural goods. Rice, dairy, poultry, corn, apples, almonds and GM soy were all listed. But officials have yet to confirm if this reflects the government's official position or remains a draft proposal.
Experts warn that if the United States insists on farm access as a precondition, the deal might collapse. They believe expectations from Washington may have been set without considering India's political realities.
Non-tariff barriers are another headache. The United States has raised concerns over India's increasing quality control orders. More than 700 are now in place, most tied to the Make in India campaign. These rules aim to block low-grade imports and boost domestic manufacturing. But they have also made it harder for American goods to enter the Indian market.
Some Indian economists have described these policies as restrictive. They argue that such controls hurt small and medium businesses by driving up compliance costs.
Trade in agriculture between the two countries already stands at $8 billion. India sends rice, shrimp and spices. The U.S. ships almonds, lentils and apples. But the United States sees a trade gap of $45 billion. It wants to shrink that by exporting more farm produce.
Experts fear tariff relaxations could open the door to pressure on India's support programs. The worry is not abstract. It is political, economic and rural.
A mini-deal now appears more likely. Something modest. A gesture. A step forward, if not a leap. Experts suggest the agreement could include tariff cuts on industrial goods, especially in automobiles. In return, India may grant limited access for items like ethanol, raisins, olive oil and select wines.
But agriculture will likely remain off-limits. No major concessions expected there.
Beyond goods, Washington wants India to make big-ticket purchases – oil, gas, aircraft, helicopters and even nuclear reactors. Foreign investment rules in retail also remain on the table. U.S. companies like Amazon and Walmart stand to benefit. New Delhi has been cautious.
The United States is also eyeing flexibility in regulations for refurbished items. That would ease entry for used electronics and other products.
Experts say if this mini-deal happens, it will revolve around tariff cuts and strategic purchases. Larger issues like digital trade, intellectual property and service exports will be shelved for future rounds.
Initially, the two sides seemed aligned. A simple principle guided them – America would focus on capital-intensive goods and India on labour-driven ones. That equation now feels out of sync.
If the talks collapse, the fallout may be limited. Experts do not expect Trump to reimpose the full 26% tariff on Indian goods. A flat 10% under Most Favoured Nation (MFN) rates seems more likely. These are the standard tariffs World Trade Organisation (WTO) members apply to each other.
In April, 57 countries faced those U.S. tariffs. Only the United Kingdom managed a deal. Singling out India would raise eyebrows.
Still, observers remain cautious. Trump is known for surprises. And surprises can override expectations.