All attention is on the trade talks between the United States and India. There is hope that both countries will soon agree on a fair trade deal covering many sectors. Teams from both sides discussed issues like market access, trade barriers, agricultural products, services, investment, and other sensitive topics. Both nations are trying to reduce their differences and find solutions that will help their economies. India’s trade talks are now being led by Darpan Jain. US Trade Representative Jamison Greer said that India has given its best proposal so far to allow more American farmers to sell their products in the Indian market, especially crops like sorghum and soybeans. India could become a big new market for US goods. His statement came after US President Donald Trump threatened to impose new tariffs on Indian rice, accusing India of pushing cheap rice into the US market. Trump announced a $12 billion aid package for American farmers, saying that cheap imports from India were hurting US rice producers.
India’s proposal has not been made public yet, but it is clear that India is being very careful, especially with agricultural products. India does not want to give the US any unfair advantage. US officials admit that entering India’s agricultural sector—especially in politically sensitive areas—is very difficult. India opposes importing certain crops, dairy products, and meat because it wants to protect its own farmers. Agriculture and dairy remain major roadblocks in the trade deal. The big question is: What will happen to Indian farmers if American crops and dairy enter the Indian market? Farmer-related issues are already very sensitive in India. Crops like maize, soybeans, wheat, cotton, rice, sugarcane, sorghum, and canola are traded worldwide and can affect farmers and food security. So India has to be very cautious. If the US truly wants to strengthen its partnership with India, it should start by reducing the high tariffs it has placed on Indian exports from 50% to around 20–25%. It should also ease its pressure on India regarding oil imports from Russia. The US wants India to buy more American agricultural products but is not offering clear access to Indian exports in return.
All this is happening at a time when global wheat supply has reached nearly 1.1 billion tons. This means the US sees India as a major potential market for its farm products. The US Department of Agriculture has also increased its estimate of global grain supply, reducing fears of shortages. This will increase competition among exporting countries for big markets like India. The USDA’s December ‘World Agricultural Supply and Demand Estimates’ report increased the global wheat supply estimate for 2025-26 by 7.5 million tons to approximately 1.1 billion tons. This increase is due to higher production in several major exporting countries. Canada saw the largest increase, with production estimated to rise by 3 million tons to 40 million tons, followed by Argentina, the European Union, Australia, and Russia. Although India is making every effort to mitigate the impact of US tariffs and is finding new markets, its import bill is rising rapidly, which is a cause for concern. Several factors contribute to this rising import bill, including surging gold prices, high crude oil prices, and dependence on electronic components, all of which India imports. This triple whammy has been exacerbated by the weakening rupee, consequently putting renewed pressure on the country’s trade deficit.
Indian and US officials are engaged in two separate sets of negotiations, primarily aimed at crafting a framework trade agreement related to tariffs and a comprehensive trade agreement. Following directives from the leadership in February, talks commenced with the goal of finalizing the initial phase by the fall of 2025. The discussions have progressed through six rounds, with the ultimate objective of increasing bilateral trade from $191 billion to $500 billion by 2030.
In 2024-25, the US successfully maintained its position as India’s leading trading partner for the fourth consecutive year, with bilateral trade reaching $131.84 billion ($86.5 billion in exports). The US contributes significantly to India’s trade portfolio, accounting for 18 percent of total merchandise exports, 6.22 percent of imports, and 10.73 percent of total merchandise trade. Exporters have emphasized the importance of this agreement, as India’s merchandise exports to the US have seen a decline for two consecutive months, falling by 8.58 percent to $6.3 billion in October, attributed to the heavy tariffs imposed by Washington. India is negotiating constructively but not at the expense of its farmers or small industries. The Modi government has also made it clear that it seeks reciprocity and supply chain partnerships, not unilateral concessions, and that it will not abandon Russian crude oil, which it considers vital for energy security. It remains to be seen whether there will be any positive news regarding the trade talks. This will require a favorable shift in attitude from the US as well.
