'Dairy sector is livelihood, not leverage': After Trump tariff, Suresh Prabhu warns against one-sided trade deal

After US President Donald Trump announced a 25% tariff and an unspecified penalty on Indian imports, former Commerce Minister Suresh Prabhu called for a return to balanced negotiations and cautioned against targeting India's rural backbone in trade talks. "In India, Dairying Agriculture are livelihoods for over 600 million poor, almost double the size of US total population,” Prabhu wrote on X. "A deal must enhance strengths of each economy and not exploit the inherent weaknesses."

Trump's announcement, which takes effect from August 1, directly links the tariffs to India's continued defence and energy ties with Russia. "India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on August first," he said. He further accused India of maintaining "strenuous and obnoxious non-monetary trade barriers" and claimed Indian tariffs were "among the highest in the world."

Prabhu, who served as commerce minister during the first Modi administration and was directly involved in trade discussions with Trump's previous term, stressed the need for a framework rooted in shared values.

"I Wish USA & India come back to negotiations to strike a good mutually beneficial trade deal. Both countries always rightly talk about our shared values, thus need a trade framework Trade Deal to strengthen these fundamentals," he wrote. "As commerce minister in Modi-1 dealt with Trump-1. I have full confidence @PMOIndia @narendramodi will protect our national interests."

India has resisted U.S. demands for duty concessions in sensitive sectors like agriculture and dairy —especially for genetically modified crops and U.S.-origin dairy products. No such concessions have been granted in any past free trade agreement. India is instead seeking rollback of the 26% additional tariffs imposed by the U.S., along with relief from high duties on steel and aluminium (nearly 50%) and automobiles (25%).

In return, India is looking for expanded market access in labour-intensive sectors like garments, textiles, leather, gems and jewellery, plastics, chemicals, shrimp, oilseeds, grapes, and bananas. The U.S. negotiating position remains focused on securing access for industrial goods, electric vehicles, wines, petrochemicals, and a broad range of agricultural and dairy items.

The Ministry of Commerce issued a formal response following Trump's tariff declaration. “The Government has taken note of a statement by the US President on bilateral trade. The Government is studying its implications. India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective,” the ministry said.

It added, “The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The Government will take all steps necessary to secure our national interest, as has been the case with other trade agreements including the latest Comprehensive Economic and Trade Agreement with the UK.”