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The US just signed a shiny new trade deal with Vietnam, and while that’s great news for Washington and Hanoi, it’s making things a lot more tense in New Delhi. Why? Because now India’s under more pressure to close its deal with America, and fast. But with a July 9 tariff deadline ticking away like a time bomb, it’s not just about sealing a deal; it’s about sealing one better than what Vietnam or China just got.
Sounds dramatic? It kind of is.
While the US wants open doors and big market access, India has drawn some thick red lines, and it’s standing firm. First off, agriculture and dairy are completely off the table. That’s non-negotiable. Indian farmers and small-scale industries are already on thin ice, and the government doesn’t want to make life harder for them, especially not with elections around the corner in key farming states like Bihar.
Finance Minister Nirmala Sitharaman made it crystal clear: We’re not touching anything that messes with our farmers.
And that includes America’s request to import genetically modified (GM) maize for ethanol. India has banned GM crops, and it’s not backing down. Why? Because local sugar mills already fear becoming irrelevant, and farmers are worried this could drive down crop prices.
Another area of contention involves GM soybean imports. The United States is advocating for broader access to GM soybeans, while India has proposed a limited arrangement that would allow the import of GM soybeans solely for oil extraction, with the leftover de-oiled cake (DOC) to be exported. However, this plan has met with political resistance from soybean-producing states, where low crop prices and electoral considerations have made the issue particularly sensitive.
Dairy imports remain a long-standing barrier. India’s high tariffs, along with cultural and regulatory restrictions, make large-scale dairy imports from the US commercially unviable. Though India is unlikely to relax its stance, the dairy sector may be used by the US as leverage in broader agricultural trade negotiations.
Beyond all this back-and-forth, there’s a bigger cloud hanging over things: global trade uncertainty. The US keeps shifting its stance on tariffs, and it’s making Indian exporters super cautious. Many are now cutting back on orders and looking elsewhere, just in case the rug gets pulled again.
But it’s not all gloomy. Sources say there’s still a chance India could become the second country after Vietnam to strike a deal with the US, and we might hear something concrete in the next 48 hours.
The only catch? Both sides have to give a little… and so far, neither looks ready to blink.
Credits – Invezz