Strained Trade Ties

India's steadfast refusal to extend duty concessions on agriculture, dairy, and genetically modified (GM) foods in the proposed bilateral trade agreement (BTA) with the United States has triggered a retaliatory move from Washington.

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In a decision that complicates ongoing trade talks, President Donald Trump has announced a 25 percent additional import duty on Indian goods entering the U.S., effective from August 7. This sharp escalation comes even as both nations remain locked in high-level negotiations, with five rounds of dialogue completed since the launch of talks in March 2025. The U.S. delegation, led by Assistant Trade Representative Brendan Lynch, is scheduled to visit India later this month for further discussions.

India's decision to hold firm on its agricultural and dairy red lines underscores not just trade calculus but broader political, economic, and cultural imperatives. These are sectors that underpin the livelihoods of over 700 million people in rural India, where any shift in tariff protections could wreak havoc. Moreover, India's aversion to GM food imports is rooted not only in consumer health and environmental concerns but also in market sensitivities tied to exports to the European Union. Accepting GM imports could jeopardize access to key European markets, even as domestic farmers struggle to compete with heavily subsidized U.S. producers.