The United States demands India to lower its agricultural import tariffs from 40% to 5% during the upcoming four-day trade negotiations in Washington. The United States maintains that this level of equivalence is necessary to achieve a balanced and sustainable bilateral trade relationship. The Indian officials warn that deep tariff cuts would damage the survival of Indian farmers who operate at subsistence levels because they lack the commercial capabilities of American agricultural operations.
The United States maintains its agricultural tariff rate stands at 5% while India maintains a 39% average tariff rate. Both parties maintain their dedication to establishing middle ground despite the potential negative impact on India’s rural economy from accepting these terms. The negotiations focus on completing the first phase of the Bilateral Trade Agreement (BTA) which serves as a pathway toward achieving the “Mission 500” target established by Prime Minister Narendra Modi and President Donald Trump in February to double trade by 2030.
The United States has not applied additional punitive tariffs to India despite imposing up to 50% levies on goods from more than two dozen other countries. The Indian negotiating team under Rajesh Agrawal shows optimism about this week’s progress yet maintains caution because of previous US trade promise failures as demonstrated by their Vietnam trade dispute.
