U.S. President Donald Trump announced 25% tariffs on imports from India amid ongoing negotiations for a bilateral trade deal, but India remains resolute against making concessions that could harm its domestic agricultural sector.
The United States has targeted India with 25% tariffs on its exports, along with an unspecified penalty, as a trade agreement remains elusive. Despite this pressure, India has not hastily moved towards a deal, unlike countries such as Japan, which recently reached agreements with the U.S. covering market access for American autos and agricultural products.
The reluctance from India stems from a desire to protect its agricultural sector from increased U.S. imports, to safeguard the interests of its local farmers who represent a significant portion of the electorate. Recently, in the trade deal with the United Kingdom signed last week, India successfully shielded its crucial agricultural sectors from tariff concessions, setting a precedent for its negotiations with the U.S.
Carlos Casanova, a senior economist at UBP, commented on the steadfast approach by India, explaining that exports to the U.S. form a relatively small portion of India’s economy. Thus, the country is cautious about opening its agricultural sector to U.S. companies. Official U.S. data from 2024 confirms that goods imports from India amounted to $87.4 billion.
India’s Commerce and Industry Minister, Piyush Goyal, emphasized India’s cautious stance regarding its agricultural sector in a recent interview. He indicated that protecting the interest of farmers and micro, small, and medium enterprises is a priority. Goyal reiterated that New Delhi is not bound by deadlines when negotiating trade agreements and would only pursue a deal that aligns with national interests. He expressed confidence in securing a beneficial agreement by October-November 2025.
In discussion with CNBC, Jayant Dasgupta, former ambassador of India to the World Trade Organization, stated that India’s red lines, particularly concerning agriculture, genetically modified foods, and dairy, are firmly drawn, suggesting limited room for concessions.
Meanwhile, Harsha Vardhan Agarwal, president of the Federation of Indian Chambers of Commerce & Industry, expressed hope that the recent U.S. tariffs would be a temporary measure, anticipating the finalization of a long-term trade agreement soon.
Analysts have noted strategic reasons for Washington to expedite an agreement with India, underscoring the importance of maintaining a strong bilateral partnership in shaping the Indo-Pacific region. Harsh V. Pant of the Observer Research Foundation highlighted the U.S.’s interest in not alienating India during these negotiations.
This ongoing negotiation showcases the delicate balancing act of international trade agreements, wherein countries must weigh domestic concerns against international diplomatic goals.
Source: Original article