Despite escalating global trade tensions, U.S. President Donald Trump said on Tuesday that the U.S. is “close to making a deal with India,” even as he announced new tariffs on 14 other countries.
Speaking from the White House, Trump confirmed the U.S. had already finalized trade deals with the U.K. and China, and now India could be next. “We’re close to making a deal with India,” he stated, but warned that for countries where negotiations stall, the U.S. is moving ahead with tariff notifications set to begin August 1. Nations like Bangladesh, Thailand, South Korea, and Japan are among those targeted.
While both U.S. and Indian trade teams are working toward a limited tariff-reducing agreement, the two sides remain at odds on key sectors—especially agriculture and dairy. The U.S. wants access to India’s vast agricultural market, including approval for genetically modified crops, but New Delhi has pushed back, citing risks to farmers’ livelihoods and food safety.
Agriculture remains a politically sensitive topic in India. Although it accounts for only 16% of the country’s $3.9 trillion GDP, the sector supports nearly half of its 1.4 billion citizens. Opening the market to U.S. imports could destabilize local pricing and provoke backlash from opposition parties.
“Granting access to the U.S. might force India to offer similar concessions to others,” one official noted, reinforcing why India has traditionally kept agriculture out of Free Trade Agreements.
Instead, India is lobbying for tariff reductions on its labor-intensive exports—footwear, leather, and garments—sectors critical to employment and economic growth. Indian negotiators argue that any deal must be reciprocal, offering benefits on both sides, particularly if both nations hope to achieve the ambitious target of $500 billion in bilateral trade by 2030.