Promising Potential? Why India Poses the Biggest Opportunity for Trade, But Also the Biggest Challenge
Before the White House’s 90-day pause on higher tariffs for other countries expires on July 9, India is one country rushing to negotiate a trade deal with the U.S.
As trade tensions impact both commodity and financial markets, the Trump administration claims progress on additional trade deals. Vice President JD Vance, during his four-day visit to India, noted advancements in negotiating a bilateral trade deal. Delhi hopes the deal will aid in avoiding higher tariffs.
Vance announced that the U.S. and India have “officially finalized the terms of reference for the trade negotiation”, setting a roadmap toward a final deal. India is part of several ongoing trade deals under the Trump administration, now boasting “18 proposals on paper” for trade deals, according to White House press secretary Karoline Leavitt.
The Wall Street Journal reports the White House might reduce tariffs to de-escalate the trade war, currently at 145%, potentially slashing them to 50-65%. Meanwhile, India’s tariffs on U.S. agricultural goods remain significant, with walnuts facing a 100% tariff and vegetable oils up to 45%, posing challenges in negotiations.
U.S.-India trade history reveals complexities, with India having previously faced exclusion from the WTO. Despite such hurdles, India remains a critical market for U.S. products like almonds, with over 400 million lbs exported in the 2023/24 crop year, valued at $932 million.
Though challenging, India offers immense potential as the world’s most populous nation, showing growth in consumer spending, potentially boosting accessibility to U.S. agricultural products.
The USDA outlines key U.S. export prospects to India, including cotton, dairy products, and fresh fruit among others. Notably, in FY 2023, India’s agricultural imports soared to $37 billion, up 51% over five years, signaling potential growth despite current import barriers compared to China and other nations.
