India has placed a final trade offer worth $150–200 billion on the table to conclude a broad trade agreement with the United States, reports indicate. However, the talks remain tense as India has refused to yield ground on agricultural concessions, a key demand from the Trump administration. With negotiations reaching a decisive phase, global trade analysts are watching closely whether US President Donald Trump will accept India’s offer or push for additional concessions.
Key Highlights Of The India–US Trade Talks
- Trade Offer Size:
India’s final offer includes market access, investment commitments, and procurement deals amounting to $150–200 billion over the next five years, making it one of the largest bilateral trade frameworks proposed by India. - Agriculture: The Sticking Point
- The US is pressing India to open its dairy and poultry markets under a tariff reduction framework.
- India insists that its smallholder farmers and cooperatives would be severely impacted by an influx of subsidised American agri products.
- Technology And Defence Deals
India has offered substantial procurement in defence and energy sectors to balance trade deficits. This includes: Sector Estimated Commitment Defence $35 billion in fighter jets, helicopters, and armed drones over the next decade. Energy $50 billion in LNG imports from US producers, supporting their Gulf Coast export facilities. Technology & Digital Services $40 billion in cloud infrastructure, AI, and semiconductor partnerships with US firms. - Tariff Relief And GSP Restoration
India has also sought restoration of the Generalised System of Preferences (GSP) benefits, revoked under the Trump administration in his previous term, which affected Indian exporters in leather, gems, textiles, and engineering goods.
Why Agriculture Remains Non-Negotiable For India
Indian officials argue that:
- Over 50% of India’s population is dependent on agriculture, with average farm holdings below 2 hectares.
- US dairy and poultry producers enjoy scale and subsidies that would drive Indian producers out of market, risking rural livelihoods.
- Political sensitivity ahead of upcoming state elections in Punjab, Haryana, and Uttar Pradesh makes it unlikely for any central government to allow deeper agri market openings.
A senior Indian trade negotiator was quoted as saying:
“India is willing to expand procurement, defence, and digital market access but our agricultural red lines are based on food security and farmer welfare.”
Trump’s Stand On India Deal
President Trump, known for his hardline trade policies, has so far refused to accept partial deals that do not address what he terms “America’s unfair trade deficits”. In recent rallies, he reiterated:
“We want a fair trade deal with India. We love India. But dairy and agriculture must open up for our farmers. Otherwise, tariffs go up.”
Implications For Indian Exports
If the trade deal collapses:
- Indian steel, aluminium, auto components, and pharmaceutical exports to the US could face higher tariffs under renewed protectionist measures.
- IT services sector remains exposed to stricter work visa regulations and digital taxes, especially under current US legislative proposals to localise cloud services.
Market Reactions And Industry Response
| Industry | Reaction To Talks |
|---|---|
| Auto | Concern over retaliatory tariffs on auto parts if no deal is reached. |
| Pharma | Worry about potential US regulatory restrictions to protect domestic generics manufacturing. |
| IT Services | Optimism about digital and AI deals but cautious about immigration policy uncertainties. |
| Agri Exporters | Support government stance to protect domestic dairy and poultry markets. |
Geopolitical Context: China Factor Looms Large
Analysts point out that US-India trade ties are not merely economic but deeply strategic, especially as the US seeks allies to counter China’s economic rise. However, Trump’s transactional approach could test even strategic partners.
- India is already increasing imports from the US in LNG, crude oil, aircraft, and digital technologies, reducing its trade surplus with the US to under $20 billion in 2025 from nearly $30 billion five years ago.
Recent Developments In Negotiations
- India offered deeper market access for US medical devices, including stents and implants, while retaining price caps under a calibrated formula to protect patients.
- E-commerce data localisation remains contentious, with India asserting data sovereignty while the US pushes for cross-border data flow guarantees.
- Defence talks include possible finalisation of MQ-9B armed drone acquisition and a framework to co-produce fighter jet engines in India under the strategic trade authorisation framework.
Expert Views On The Way Forward
| Expert | Comment |
|---|---|
| Prof. Biswajit Dhar, Trade Economist | “India’s agricultural sector is structurally unprepared for full liberalisation. The offer on technology, energy, and defence is substantial.” |
| Richard Rossow, US-India Policy Analyst | “If Trump rejects this deal, it will signal that no trade partner is immune to his tariff-first approach, even key strategic allies.” |
| Dr. Arpita Mukherjee, ICRIER | “India must strengthen its agri supply chains to eventually negotiate from a position of confidence rather than defensive compulsion.” |
What Happens Next?
President Trump is expected to take a final call within the next two weeks as internal consultations with US farm lobbies, trade advisors, and Republican strategists continue.
If accepted, the deal will:
- Unlock major FDI flows in digital and energy sectors.
- Boost Indian defence modernisation with access to next-generation systems.
- Reduce geopolitical tensions amid rising China assertiveness in the Indo-Pacific.
If rejected, India may:
- Pivot further towards EU and Southeast Asian markets.
- Strengthen domestic manufacturing under Atmanirbhar Bharat to reduce dependence on imported components.
- Accelerate trade pacts under the Comprehensive Economic Partnership Agreements (CEPA) model with Gulf and ASEAN nations.
Conclusion
The final outcome will shape not just India–US trade ties but also the future of global supply chains, geopolitical alliances, and strategic economic architecture in an increasingly polarised world order.
Disclaimer: This article is based on ongoing trade negotiations, expert insights, and government statements as of publication date. Readers are advised to track official Ministry of Commerce and USTR releases for formal announcements on final trade deal terms and implementation timelines.
