U.S. President's Decision Crucial for India-U.S. Trade Deal

The fate of the trade agreement between India and the United States now lies in the hands of the U.S. President. According to informed officials, India has presented its best offer on trade issues to the United States, and the outcome of a potential interim agreement is now dependent on the decision of the U.S. President. The discussions have been confidential, with India clearly outlining its non-negotiable red lines, which include allowing the export of genetically modified crops to India and opening up India's dairy and automotive sectors to U.S. imports.

Intense negotiations have been underway for several months, with both sides aiming to reach an agreement before the U.S. imposes tariffs on July 9. However, the Indian government, led by the Prime Minister, has adopted a more cautious stance in recent negotiations due to increasing pressure to protect India's politically sensitive agricultural sector. The Indian Commerce Minister stated that trade negotiations are guided by national interests and that the government will not be constrained by any deadlines. Earlier, the Indian government threatened to impose retaliatory tariffs on certain U.S. goods.

India and the United States have agreed on the reference terms for a bilateral trade agreement and have been negotiating an interim agreement. India hopes to use this agreement to temporarily halt the U.S.'s plans to increase import tariffs. The U.S. President has indicated that he will announce the trade agreement or send tariff letters to various countries on Monday, with the increased tariffs set to take effect on August 1. If India does not secure a deferral, it will face a 26% tariff.

According to informed officials, the success of the agreement now hinges on whether the U.S. President and the Indian Prime Minister can reach a consensus. The Indian Ministry of Commerce and Industry has not yet responded to requests for further comment. The U.S. is seeking access to the Indian market for its genetically modified crops, such as corn and soybeans, which are currently restricted. One official mentioned that India has proposed allowing the import of some genetically modified animal feed, but U.S. officials rejected this concession.

Opposition parties and farmer groups in India have warned the government against making too many concessions to the White House to finalize the agreement. Millions of Indians rely on agriculture for their livelihood, and farmers are a key voter base for the ruling party, which faces crucial state elections in the coming months. "We will not allow the government to sacrifice the health of Indians for profit," said a member of the United Farmers' Front. He added that genetically modified crops would "harm the economic prospects of farmers who are already under severe economic stress."

The Indian government does not permit the cultivation of genetically modified food crops, despite some varieties that could enhance yields. The commercial promotion of genetically modified mustard has been stalled due to legal challenges in the country's highest court, and in 2010, the government rejected an application to cultivate genetically modified eggplant. In the automotive sector, the U.S. is seeking favorable terms for component manufacturers, but India argues that this would disadvantage its domestic industry.

The main opposition party, the Indian National Congress, is pessimistic about the ruling party's ability to resist U.S. demands. "Mark my words, Modi will meekly surrender to Trump's tariff deadline," said a leader of the Indian National Congress. The agriculture minister of the southern Indian state of Kerala warned last week that if India does not protect the interests of its farmers, millions will lose their livelihoods. He stated, "Agriculture is a state subject, and the views of the states should have been sought before negotiating the opening of the agriculture sector."