India-US Trade Talks Hit Roadblock Over Tariffs

Trade negotiations between India and the U.S. stall due to disagreements on tariffs for goods such as auto components and farm products. India resists steep tariff cuts demanded by the U.S., citing political and economic implications, while strategic and export-related tensions further complicate the dialogue.

In the latest round of trade negotiations, India and the United States find themselves at an impasse, primarily due to contentious tariff issues involving auto components, steel, and agricultural goods. According to sources from the Indian government, this deadlock has dashed previous hopes of finalizing an interim agreement before President Trump's looming deadline for reciprocal tariffs.

The central impasse arises from India's heavy reliance on agriculture, a critical employment source for the rural populace. This reliance makes New Delhi politically reluctant to accept the U.S. demands for steep tariff cuts on corn, soybean, wheat, and ethanol imports, over fears of subsidized U.S. products undermining local markets. Meanwhile, domestic sectors including auto and pharmaceuticals are advocating for a careful and phased deregulation of protective measures to stave off aggressive U.S. competition.

Further complicating matters are India's expectations of preferential trade treatment juxtaposed against U.S. demands for increased market access across various sectors such as dairy, alcoholic beverages, and medical devices. Even as India extends concessions through tariff reductions on numerous farm products and increases in defense purchases, Indian officials await concrete proposals amid uncertainty spurred by fluctuating U.S. trade policies under President Trump. Such dynamics, coupled with geo-political considerations involving Pakistan, continue to shape the cautious relationship between these two major trade partners.

(With inputs from agencies.)