During trade talks with their American counterparts, Indian officials have raised objections to the US demands for tariff concessions in the domestic diary sector.
According to media reports, India refused to give any concession in the domestic dairy sector, where over 80 million small Indian farmers are engaged in. However, both sides have exuded confidence that a free trade deal could be arrived at before the July 9 deadline.
On Tuesday, US President Donald Trump said, “I think we’re going to have a deal with India”. He again stressed India to allow more competition and cut tariffs.
There will be no compromise on dairy, this is our red line
A senior government source said, ‘There will be no compromise on dairy. This is our red line.’ Meanwhile, the White House described India as an important strategic partner in the Indo-Pacific sector and said that the trade deal between the two countries is now very close to being announced.
The trade talks between India and the United States in Washington have reached their sixth day on Tuesday. Rajesh Agrawal, the Special Secretary of the Ministry of Commerce, who is leading the Indian delegation, has extended his visit by one more day to resolve the deadlock in the deal between the two countries.
America expects concessions from India in the agriculture-dairy sector
On the other hand, America is expecting tariff concessions from India in the agriculture and dairy sectors. America wants a reduction in tariffs on industrial products, electric vehicles, wine, petrochemical products, dairy, apples, nuts, and genetically modified crops. However, it is difficult for India to accept this demand from America.
Dairy Industry in India
The dairy industry in India is largest globally, accounting for 23% of global milk production. The industry contributes 5% to the national economy and directly supports more than 8 crore farmers.
The nation’s milk production increased at a CAGR of 6.2% from 146.31 million tonnes (MT) in 2014-15 to 209.96 MT in 2020-21.
Source: India Brand and equity Foundation
India is seeking concessions from the US in these sectors
India is seeking tariff concessions from the US in several labor-intensive sectors such as fabric, apparel, gems and jewelry, leather, plastics, chemicals, shrimp, oilseeds, grapes, and bananas.
The agreement cannot harm the rural economy
Sources say that these concessions will not harm America’s domestic interests and are unlikely to face opposition. However, India has denied any concessions in agriculture, especially in the dairy sector. India says that this agreement cannot harm its rural economy.
Read More: Get more News from Dairy Sector
Talks on the trade deal expected to continue on Wednesday
Talks on the trade deal between the two countries are expected to continue on Wednesday. During this time, Foreign Minister S. Jaishankar will also meet his American counterpart Marco Rubio during a diplomatic meeting.
America imposed a 26% reciprocal tariff on India on April 2
America imposed a reciprocal tariff of up to 26% on Indian imports on April 2, which was suspended for 90 days. However, a base tariff of 10% is still in effect. India seeks exemption from the additional 26% tariff. If this trade deal fails, these tariffs will be reinstated after July 9.
Both countries aim to reach trade of $500 billion by 2030
India and the United States aim to make this interim trade agreement a first step towards a Bilateral Trade Agreement (BTA). Both countries have a target to double bilateral trade to 500 billion dollars by 2030. Currently, the trade between the two countries is 191 billion dollars.
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