 "US trade deadline looms amid global scramble, Indian team extends Washington stay")
Indian negotiators have extended their stay in Washington DC as the deadline to reach a deal with the United States is fast approaching.
The reprieve from US President Donald Trump’s ‘reciprocal tariffs’ is ending on July 9. Countries across the world, including India, are in a scramble to reach a deal, or at least a mini deal, to avoid facing high tariffs — 26 per cent in India’s case.
Even as Trump has indicated that a "very big" deal with India is near , the two sides appear to have hit a logjam over contentious sectors like agriculture and dairy. While Trump wants India to open its market to American genetically modified (GM) crops and dairy products, India is unwilling to do as GM food crops are not allowed in India and American dairy industry uses animal feed for cattle — such cattle’s product would not be culturally acceptable to many Indians.
Trump has indicated that he would not extend the reprieve beyond July 9 and would either reinstate tariffs or set new ones.
Trump’s stance on agriculture, dairy sectors key roadblock
The Trump administration has been pushing India to open its markets to American dairy and GM crops , apples, and nuts, according to Deccan Chronicle.
Agriculture and dairy are politically sensitive sectors in India and any deal deemed unfavourable could lead to blowback.
Moreover, India wants an assurance that once a deal is reached, all US tariffs, including the baseline tariff of 10 per cent, would be removed and 50 per cent duty on steel and 25 per cent on automobile parts would be removed, as per Hindustan Times.
Even as the Trump administration is open to tariff rate quotas (TRQ), which means that tariff-free access for any product will apply up to a certain quantity, the insistence of such access for agriculture and dairy sectors is proving to be an issue, according to the report.
“The problem lies in wanting India to also open its sensitive sectors. Dairy imports are restricted for two reasons. First, India’s dairy farming is at a subsistence level with one or two cows or buffaloes. The livelihoods of millions of farmers are at stake as they could not compete with America’s commercial-scale dairy farms. Secondly, the US cattle feed includes non-vegetarian products, something against religious sentiments of Indian consumers,” a source told the newspaper.
Impact Shorts
More ShortsSimilarly, the source said that the Trump administration is not willing to agree a mechanism to certify that US agriculture exports to India are not genetically modified.
Analysts have said that India and the United States could reach a ‘mini deal’ in line with the US-UK trade deal announced in May. Such a deal, according to Deccan Chronicle, could focus just on tariffs and leave other issues like services trade, intellectual property rights, and digital regulations for future negotiations.
Trump sows uncertainty, divides world
Trump’s topsy-turvy trade policy has sown uncertainty in the world.
Trump’s lack of clarity has led to hardening of stance of traditional US partners like India and Japan. Even in the European Union (EU), countries like France have pushed for a tougher stance in negotiations.
Trump has also resorted to arm-twisting that has yielded him results, such as his stopping negotiations with Canada leading to the country revoking digital services tax. The talks have now resumed between the United States and Canada.
While Trump has been arm-twisting allies and partners, he has been friendly with adversaries like China and Russia.
Trump has reached a trade understanding with China and is now working on a full deal. He has also spared Russia from reciprocal tariffs.
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