CONTENTIOUS ISSUES
US and Indian negotiators have held multiple rounds of discussions to resolve contentious issues, particularly over market access into India for US agricultural and dairy products.
In its latest statement, India said it attached the utmost importance to protecting and promoting the welfare of its farmers, entrepreneurs, and small businesses.
“The government will take all steps necessary to secure our national interest, as has been the case with other trade agreements,” it said.
The setback comes despite earlier commitments by Prime Minister Narendra Modi and Trump to conclude the first phase of a trade deal by autumn and expand bilateral trade to US$500 billion by 2030, from US$191 billion in 2024.
On Wednesday, Trump also said he had made a deal with India’s arch South Asian rival Pakistan to develop that country’s oil reserves. “Who knows, maybe they’ll be selling Oil to India some day,” Trump wrote on Truth Social.
Since India’s short but deadly conflict with Pakistan, New Delhi has been unhappy about Trump’s closeness with Islamabad and has protested, which has cast a shadow over trade talks.
“Politically, the relationship is in its toughest spot since the mid-1990s,” said Ashok Malik, partner at advisory firm The Asia Group. “Trust has diminished. President Trump’s messaging has damaged many years of careful, bipartisan nurturing of the US-India partnership in both capitals.”
Besides farm products access, the US had flagged concerns over India’s increasingly burdensome import-quality requirements, among its many non-tariff barriers to foreign trade, in a report released in March.
The new tariffs will impact Indian goods exports to the US, estimated at around US$87 billion in 2024, including labour-intensive products, such as garments, pharmaceuticals, gems and jewellery, and petrochemicals.
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