India, US Finalise Interim Trade Deal: GM Crops Rejected, Tariffs Realigned – What It Means For Exports, Innovation And Farmers | World News

New Delhi: India and the United States are preparing to sign a temporary trade agreement covering key areas such as agriculture, processed foods and industrial tariffs this week. The agreement was completed after months of negotiations between the two countries.

India agreed to reduce tariffs in some US agricultural imports such as apple, blueberries and blackberries and selected processed food products. However, the new Delhi clearly stated that there would be no agreement on genetically modified (GM) crops. According to the authorities, the GM crops continue to be a red line due to internal concerns and commercial negotiations approaching the European Union (EUFTA).

The agreement will face a tariff structure of an average tariff of 11.5% of Indian goods entering the United States, a 7% tariff for US goods entering India.

India also refused to approach the blanket tariff approach in automobiles. Instead, he requested separate signs based on the type of vehicle and category. The United States is said to have accepted this offer.

There is no agreement on dairy products. The United States had pressure on India’s Milk market, but India did not accept it and showed the potential impact on small farmers and rural revenues. According to the agreement, only processed dairy products will be allowed.

The agreement comes at a time when the US reviews the trade approach with various countries. President Donald Trump has announced higher tariffs from the European Union (EU), Japan, South Korea, Mexico and other nations since August 1st. India is seen as a key trade partner in this changing environment.

Meanwhile, a report of SBI Research shows that India can benefit from this reorganization. The study says India has a comparative advantage in chemical exports, including pharmaceuticals. If the new Delhi catches only 2% of the US chemical import market, this can add 0.2% to India’s GDP.

The report also emphasizes opportunities in textile and clothing sectors. If India increases its share in the US clothing market by 5%, it can add 0.1% to GDP.

India also reviews the Free Trade Agreement (FTA) with ASEAN countries. The aim is to address the tariff gaps and to prevent large -scale evacuation of goods from countries like China through ASEAN partners.

However, the SBI report warns potential risks for the Indian milk sector. If the sector has been opened to US milk imports, milk prices may decrease by 15%and may cause 1.03 Lakh Crore estimated income loss to farmers. In addition, India’s gross added value (GVA), which has great effects on rural employment, may result in loss of 51,000 RS Crore.

The last talks on the temporary agreement are expected to end this week. Officials of the Ministry of Commerce and Industry have already reached Washington for signature. The agreement is part of the broader trade debates that can continue in the coming months.