Interim trade deal between India, US in 48 hrs? New Delhi firm on agriculture, dairy red lines

India and the US are likely to sign an interim deal within the next 48 hours, days before the July 9 deadline on the pause of Trump's 'Liberation Day' reciprocal tariffs expires, as per sources. The negotiations between the two countries are in the last stages, with India being firm in its stance of not opening up the agriculture and dairy sectors completely to the US. 

Washington, DC had demanded that India open its market to genetically modified crops. New Delhi has viewed it as a red line due to risks to India's farmers and the agriculture sector at large.

Moreover, India has also sought greater market access for its labour-intensive goods such as garments, leather goods, textiles, gems and jewellery, plastics, and chemicals. The deal has been stuck since both sides are negotiating their interests, with the Indian delegation led by special secretary Rajesh Agarwal having to extend its stay in Washington.

In case there is no trade deal between the two countries before July 9, Indian exports to the US would face a baseline tariff of 10% and 26% reciprocal tariffs, totalling the tariffs to 36%. 

Earlier, Deputy Spokesperson of the US State Department Mignon Houston said that the US considers India as an "essential partner" in the Indo-Pacific region. “We want trade that is fair and reciprocal. Working closely, India is an essential partner in the Indo-Pacific and the Quad."

Speaking to ANI, Houston emphasised the value of a strong, balanced trade relationship. "We expect all partners to understand why this is so important to the 'America First' agenda, that we look for trade policies that have a fairness, reciprocal, balanced way to ensure that all parties benefit," she said. 

Furthermore, she defended the Trump administration's decision to impose tariffs, stating that unfair trade practices significantly harmed American industries and farmers. 

“The United States has an open economy, but there are unfair trade policies that have impacted US farmers and industries. These tariffs are a way for countries to meet us at a place of fairness."