India, US near Bilateral Trade Agreement amid Tariff Pressure

India and the United States are in the final stages of preparing a bilateral trade agreement, with efforts now focused on drafting the deal’s formal text. The Bilateral Trade Agreement (BTA) is expected to be finalised by July 8, just ahead of the implementation of reciprocal tariffs by the US administration.

Negotiations had earlier faced setbacks due to disagreements in critical sectors, including dairy, agriculture, digital trade, and medical services. A significant point of contention is US dairy exports. Indian officials have insisted that unless the US modifies its cattle feed practices, particularly the use of non-vegetarian feed, or complies with India’s vegetarian certification standards, dairy products like American cheese and butter will not be allowed.

However, India has shown flexibility by indicating it may consider tariff reductions on select imports such as nuts and fruits. A senior Indian government official stated that the US is pushing hard for agricultural market access, but for India, it’s a matter of protecting livelihoods, not just commerce.

The rush to close the agreement by July 9 is driven by the threat of a 10% universal tariff and a further 16% country-specific US tariff on Indian exports. Indian authorities have criticised this move as contrary to the February 13 joint statement, which promised a mutually beneficial trade agreement by fall 2025.