The US Must Steer Clear of Deal-Breakers in Trade Talks

A deal with India could be lost if the US insists on moves that injure our food security and healthcare

- ABHIJIT DAS

Although these are early days in the negotiations for a multi-sectoral bilateral trade agreement (BTA) between India and the US, the final outcome is already being envisaged as the 'mother of all deals' and a 'grand trade deal'.

Both countries are expected to negotiate hard for finalizing an agreement that maximizes benefits for their respective stakeholders. Apart from tariff-related issues, how the US addresses India's concerns on agriculture and affordable access to medicines could ultimately determine the success or failure of these negotiations. What could be the non-tariff-related demands of the US in these two areas and what are India's sensitivities?

US commerce secretary Howard Lutnick has articulated America's demand that India must open up its agricultural sector to imports from the US. While this would involve issues related to tariffs and possibly import quotas, the US could also take forward its objective of seeking changes in India's minimum support price (MSP) scheme, especially for rice.

The 2024 National Trade Estimate Report on Foreign Trade Barriers brought out by the United States Trade Representative (USTR) includes the following: "India's excessive subsidization through market-price support has gone far beyond its domestic food security needs and has helped India secure its place as the top global exporter of rice, accounting for more than 40% of global rice exports in recent years."