The long-anticipated India US trade deal is now at a decisive crossroads as the July 9 deadline set by former U.S. President Donald Trump looms large. Despite high-level negotiations and mounting diplomatic urgency, both countries remain locked in a deadlock over critical trade issues, threatening to impose a steep 26% reciprocal tariff on Indian goods entering the American market.
With economic stakes rising and time slipping away, hopes for a swift resolution are dimming, even as negotiators push for a breakthrough.
Why the India US Trade Deal Matters Now More Than Ever
The India US trade deal deadlock comes at a time when both nations seek to strengthen bilateral ties, enhance market access, and promote fair competition. However, sticking points particularly surrounding U.S. agricultural exports—continue to hinder meaningful progress.
According to sources familiar with the talks, Indian officials, led by chief negotiator Rajesh Aggarwal, have extended their stay in Washington in an effort to iron out final differences. Yet, thorny issues related to tariffs on genetically modified crops, dairy products, and domestic farmer protection remain unresolved.
What’s Causing the Trade Deal Deadlock?
Agricultural Access Demands
The U.S. is pressing India to significantly lower import duties on key agricultural products like corn, soybeans, apples, almonds, and dairy items. In return, the U.S. promises reduced tariffs on Indian industrial goods. But India, wary of political fallout and the impact on small-scale farmers, is holding firm.
“Any compromise on food safety and farmer livelihoods is a non-starter,” one senior Indian trade official told Next Tech Plus.
India has long resisted opening its dairy and farm sectors in trade deals with Australia, the UK, and the EU—and is adopting a similar stance with the U.S.
A Clash Over Genetically Modified Foods
Another major roadblock in the India US trade deal is the use of genetically modified (GM) crops. The majority of American corn and soybean exports are GM-based—something India bans over health and safety concerns.
To navigate this, India is considering a “self-certification” mechanism that would allow U.S. exporters to declare GM-free status, subject to Indian verification. However, creating a reliable digital system and ensuring food safety compliance is a complex task that may take time.
Tariff Concessions: A Stalemate
Additionally, India has called for zero-tariff access for its exports, which include engineering items, textiles, leather, medicines, and auto components. The U.S., however, has refused to commit to immediate tariff elimination, citing the Trump-era policy of a baseline 10% tariff.
Although this tariff may still offer Indian exporters a competitive edge, Indian officials are pushing for guarantees that tariffs won’t be reimposed arbitrarily after the deal is signed.
Why the Clock is Ticking: India US trade deal
The July 9, 2025, deadline set by former President Trump leaves little room for delays. Without a signed interim agreement, Indian exports face a crippling 26% tariff, which could hurt industries already grappling with global supply chain disruptions.
Trump, who is still an influential figure in American politics, stated this week that he does not expect the suspension of tariffs to be extended further although he remains optimistic a deal is “very close.”
A Critical Test of Diplomacy
The India US trade deal deadlock is more than just a policy impasse—it’s a test of political will and economic strategy. Both nations have much to gain from cooperation and even more to lose from failure.
As the countdown begins, all eyes are on Washington and New Delhi. A breakthrough would signal a new chapter in Indo-U.S. relations. But without compromise, the clock may strike midnight on a deal years in the making.