India says no to US ‘take-it-or-leave-it’ trade demands on sensitive market access: Report

Negotiations are expected to continue virtually, with both sides aiming to finalise a deal before the 90-day pause on reciprocal US tariffs ends on July 8.

As the India-US bilateral trade negotiations enter their final phase, discussions have hit a sensitive patch, with key sticking points emerging in sectors such as dairy, agriculture, digital, and medical services. According to a Mint report citing people familiar with the matter, Washington is pressing hard to open up these sectors, while New Delhi is seeking a more balanced agreement that protects vital domestic interests.

The talks, held in New Delhi from June 4 to 10, were led by Brendan Lynch, Assistant US Trade Representative for South and Central Asia. While part of the US delegation has returned, the remaining officials are continuing discussions in India, seeking firm commitments on market access in these contentious areas, according to the report.

Negotiations are expected to continue virtually, with both sides aiming to finalise a deal before the 90-day pause on reciprocal US tariffs ends on July 8.

India has traditionally resisted liberalising sectors like dairy and agriculture due to social sensitivities and fears of unregulated competition, the Mint report noted. A source quoted in the report said talks have not progressed as initially envisioned. “The negotiations are not progressing as expected. The talks were meant to be two-way, as agreed. However, the US team’s insistence on opening certain critical sectors comes across as a take-it-or-leave-it offer,” the person told Mint.

Mint said it reached out to the spokespersons of the US Secretary of Commerce, the USTR, and the US Embassy in New Delhi, as well as India’s commerce and external affairs ministries. Responses were awaited at the time of publishing. Moneycontrol could not independently verify the report.

One of the major hurdles is US dairy exports. Indian negotiators have firmly stated that unless the US alters its animal feed practices, particularly its use of non-vegetarian feed for cattle, or adopts India’s vegetarian certification norms, products like American cheese and butter will not be allowed entry. However, India has expressed openness to considering tariff cuts on select items such as nuts and fruits.

The urgency to seal a deal by July 9 stems from the looming imposition of a 10 percent universal tariff and an additional 16 percent country-specific US tariff on Indian goods. Indian officials reportedly view the US position as deviating from the spirit of the joint statement issued by the two countries on February 13, which pledged a “mutually beneficial” Bilateral Trade Agreement (BTA) by fall 2025.

According to Mint, the US is pushing for steep cuts in duties on its agricultural exports, including shrimp and dairy, and for the removal of non-tariff barriers, without providing significant reciprocal access to Indian products.

Still, Indian officials remain optimistic. “It’s not that it can’t be done, it’s possible, as both countries are in favour of it. In fact, India was the first country to be offered a trade agreement. We are trying our best to make it happen and keep the trade dialogue on track,” a person aware of the developments told Mint. The individual also dismissed speculation that geopolitical shifts were slowing progress, pointing to recent US trade deals with the UK and China as signs of Washington’s continued engagement.

Indian negotiators have also flagged concerns over stringent US sanitary and phytosanitary norms and drug regulations. Provisions such as the destruction of entire fruit consignments if a few samples fail to meet standards have been described as overly harsh and trade-restrictive, the Mint report added.