India, U.S. Edge Toward Limited Trade Deal Amid Stalemates In Key Sectors

As India and the United States continue to engage in trade negotiations, sources indicate that only a limited or "mini" trade deal may be finalised this year. PTI quoted sources saying, talks have been progressing on multiple fronts, but long-standing sticking points — particularly in agriculture and industrial goods — remain unresolved.

One of the major hurdles is the United States' demand for greater market access in India’s dairy and agricultural sectors. “It would be a big hit to our domestic farmers, and cow milk is a cultural-religious issue,” said an Indian official familiar with the negotiations. Historically, India has not opened up these sensitive sectors in any of its free trade agreements (FTAs).

According to PTI, India is pushing the U.S. to roll back the tariffs imposed on Indian aluminium and steel products and is seeking relief from the "Liberation Day" tariffs that Washington levied on a host of Indian exports during previous trade spats.

The U.S. is seeking tariff reductions on industrial goods, automobiles — particularly electric vehicles — and specific agricultural and processed food items such as apples, tree nuts, genetically modified crops, wines, and petrochemical products.

On its part, India’s key interests lie in securing duty concessions, as reported by the hindu, for its labour-intensive export sectors, including textiles, garments, gems and jewellery, leather goods, plastics, chemicals, shrimp, oil seeds, grapes, and bananas.

Earlier this year, the Union Budget 2025 laid the groundwork for further negotiations by reducing import duties on several items. These included shrimp and shrimp paste, high-end automobiles and motorcycles, and select categories of electronic goods. These measures are viewed as steps to demonstrate India’s willingness to liberalise certain markets under the framework of bilateral or mini deals.

While the mini-deal may not cover all contentious issues, both sides appear eager to establish momentum for a larger, more comprehensive agreement in the future.