US trade talks: Trump makes big tariff statement again, puts ball firmly in India's court

Time of India

3 days ago

India and the United States are in a race against time. With days to go, officials from both countries are scrambling to seal a Bilateral Trade Agreement before the 9 July cut-off. The deal, if done, could spare both sides a steep tariff spike. US President Donald Trump on Tuesday (local time) reaffirmed that India-US will soon strike a trade deal with "much less tariffs", allowing both countries to compete.
President Donald Trump remains confident. Speaking to reporters, he said, "I think we are going to have a deal with India. And that is going to be a different kind of a deal. It is going to be a deal where we are able to go in and compete. Right now, India does not accept anybody in. I think India is going to do that, and if they do that, we are going to have a deal for much less tariffs."
India and the US have been negotiating over a Bilateral Trade Agreement (BTA) before the critical July 9 deadline of the 90-day pause on tariff escalations.
Meanwhile, India has adopted a firmer stance on agricultural matters as high-stakes trade negotiations with the United States reach a pivotal moment, government sources said on Monday.
Farm front lines
But backroom talks in Washington are tense. India's delegation, led by Chief Negotiator Rajesh Agrawal, has extended its stay in a bid to close the gaps. Agriculture is the hardest nut to crack.
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One senior government source said bluntly, 'There is no question of conceding on dairy. That's a red line.' India's dairy sector supports over 80 million people. For Delhi, opening it up is politically unthinkable.
External Affairs Minister S Jaishankar underlined the stakes. 'We are in the middle, hopefully more than the middle, of a very intricate trade negotiation. Obviously, my hope would be that we bring it to a successful conclusion,' he told Newsweek. But he warned, 'There will have to be give and take.'
Battles over beans and barriers
Washington wants more. It is pressing India to slash duties on apples, nuts and genetically modified crops. The bigger goal is to tap India's massive farm market to trim a $45 billion trade gap.
Richard Rossow at Washington's Center for Strategic and International Studies said, 'There are two real challenges to concluding an initial agreement. First on the list is US access to the Indian market for basic agriculture products. India will need to protect its basic agriculture sector for economic and political reasons.'
The second headache? Non-tariff barriers. India's Quality Control Orders — more than 700 rules covering imports — block low-grade goods and push local manufacturing. Suman Berry at
Niti Aayog
called them a 'malign intervention' that drives up costs for small businesses.
What's at stake
No one wants a tariff war. If talks collapse, the suspended 26% levy snaps back. That would hit Indian exporters and American firms alike. Already, India's baseline 10% tariff remains. Trump's team is clear: if India holds firm on farm barriers, the US may look elsewhere.
Still, there is hope for a middle path. Ajay Srivastava of
Global Trade Research Initiative
said, 'The next seven days could determine whether India and the US settle for a limited 'mini-deal' or walk away from the negotiating table — at least for now.'
Mini-deal or bust?
The likely outcome, experts say, is a slimmed-down pact. India could offer tariff cuts on cars, industrial goods and select farm products like almonds or ethanol. The US may push Delhi to buy oil, aircraft or ease rules for big retailers like Amazon and Walmart.
Mr Rossow recalled how the original vision was clearer: 'The two leaders [Trump and Modi] laid out a simple concept in their first summit this year. The US would focus on manufactured goods that are capital-intensive, while India would focus on items that are labour-intensive.'
Behind the immediate scramble is a bigger goal. Both sides want to lift trade from $191 billion now to $500 billion by 2030. Phase one aims to finish by autumn next year.
But that dream rests on this week. If talks fail, tariffs bite. If they succeed, companies on both sides get a break. For now, all eyes are on Washington. Time is short, stakes high — and the farm fields of India have never loomed larger in a global trade deal.
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