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India-US Talks Hit Tariff Hurdle Over Labor-Intensive Sectors

The Daily Guardian

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July 03, 2025

As negotiations for a long-anticipated Free Trade Agreement (FTA) between India and the United States enter their final stretch, India is making a last-minute, high-stakes push for full tariff elimination on its labor-intensive exports.

- TDG NETWORK

India-US Talks Hit Tariff Hurdle Over Labor-Intensive Sectors

According to the Global Trade Research Initiative (GTRI), without duty-free access for sectors like garments, footwear, carpets, and leather goods, the deal could become politically unsellable at home. India's insistence is rooted in a combination of economic strategy and domestic political considerations.

These labor-intensive sectors—dominated by small and medium enterprises and providing critical employment across states like Uttar Pradesh, Tamil Nadu, Gujarat, and West Bengal—contributed over $14.3 billion to India's exports to the U.S. in FY2025.

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