The United States and India are in a race against time to complete a long-anticipated trade agreement before President Donald Trump’s July 9 deadline. Failure to strike a deal could lead to new tariffs of up to 26% on Indian goods entering the U.S. market. The urgency follows a recent trade agreement between the U.S. and Vietnam, which has raised the stakes for India as it seeks to protect its exports.

The story, first reported by Reuters and shared in a viral tweet by entrepreneur Mario Nawfal, reveals key tensions in the negotiations. Talks have stalled over U.S. demands for access to India’s market for dairy products and genetically modified (GM) crops, two sectors India refuses to compromise on.

What’s Delaying the Deal?

Despite weeks of discussions, two major issues continue to block progress: U.S. dairy imports and genetically modified agricultural products. American trade representatives are pushing for greater access to India’s 1.4 billion-strong consumer base. However, India has firmly resisted, citing cultural, health, and economic concerns.

India’s dairy industry is made up of small farmers, many of whom depend on traditional farming practices. Genetically modified crops are another sticking point, as Indian policymakers have historically resisted introducing GM food into the supply chain due to environmental and health concerns.

India has made it clear that while it is open to some flexibility, the government will not accept terms that harm its agricultural sector or threaten the livelihoods of millions of farmers.

India Offers Limited Concessions

While India is standing firm on agriculture, it has shown openness in other areas. Trade officials have reportedly offered tariff reductions on items like walnuts, almonds, and medical devices, products that don’t directly compete with Indian manufacturers.

These offers are seen as goodwill gestures to keep negotiations moving forward, but experts suggest they may not be enough to satisfy the U.S. side unless there’s progress on core agricultural demands.

Trump’s Strategy: Trade Wins Through Tariff Pressure

This trade push is part of Trump’s broader economic approach, which uses tariff threats to force favorable deals for U.S. companies. After giving Vietnam a “sweet deal,” as Nawfal noted, Trump is pressuring India to avoid the same fate, or worse. In fact, Reuters also reports that Japan could be next in line for increased tariffs if it fails to meet U.S. demands.

Trump argues that a trade deal with India would create huge opportunities for American businesses, particularly in the agricultural, medical, and technology sectors. He believes the deal would be a win for U.S. exports and a message of strength ahead of the 2024 presidential election season.

What’s at Stake?

The July 9 deadline leaves little time for either side to shift positions dramatically. For India, the cost of failing to secure a deal could include billions in new tariffs and strained ties with a key trading partner. For the U.S., especially under Trump’s leadership, the situation offers a chance to lock in a significant political and economic win.

The outcome of these negotiations will have lasting consequences not only for the U.S. and India but also for broader global trade dynamics.

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