Discussions between India and the US are reaching a critical juncture on June 24, with negotiators aiming to finalize a Bilateral Trade Agreement that addresses lingering contentious issues, including agricultural imports like genetically modified red sorghum and soybean oil, while India remains steadfast against allowing US dairy products. India is particularly focused on securing preferential treatment within the deal to safeguard against potential future tariffs arising from any updated US Section 301 actions and seeks exemptions from Section 232 tariffs on strategic goods like steel and aluminum. Open debates also persist over data localization for Indian citizens and the regulation of online platforms, with India aiming to assert its governance supremacy on these matters and its ability to procure Russian oil independently. The finalization of this deal is seen as crucial for India's economic recovery, with the potential to boost GDP growth and create hundreds of thousands of jobs in key export sectors, despite potential US pressure regarding tariffs and the looming July 10th deadline for existing Section 301 investigations.

Discussions between India and the US are reaching a critical juncture on June 24, with negotiators aiming to finalize a Bilateral Trade Agreement that addresses lingering contentious issues, including agricultural imports like genetically modified red sorghum and soybean oil, while India remains steadfast against allowing US dairy products. India is particularly focused on securing preferential treatment within the deal to safeguard against potential future tariffs arising from any updated US Section 301 actions and seeks exemptions from Section 232 tariffs on strategic goods like steel and aluminum. Open debates also persist over data localization for Indian citizens and the regulation of online platforms, with India aiming to assert its governance supremacy on these matters and its ability to procure Russian oil independently. The finalization of this deal is seen as crucial for India's economic recovery, with the potential to boost GDP growth and create hundreds of thousands of jobs in key export sectors, despite potential US pressure regarding tariffs and the looming July 10th deadline for existing Section 301 investigations.

Discussions between India and the US are reaching a critical juncture on June 24, with negotiators aiming to finalize a Bilateral Trade Agreement that addresses lingering contentious issues, including agricultural imports like genetically modified red sorghum and soybean oil, while India remains steadfast against allowing US dairy products. India is particularly focused on securing preferential treatment within the deal to safeguard against potential future tariffs arising from any updated US Section 301 actions and seeks exemptions from Section 232 tariffs on strategic goods like steel and aluminum. Open debates also persist over data localization for Indian citizens and the regulation of online platforms, with India aiming to assert its governance supremacy on these matters and its ability to procure Russian oil independently. The finalization of this deal is seen as crucial for India's economic recovery, with the potential to boost GDP growth and create hundreds of thousands of jobs in key export sectors, despite potential US pressure regarding tariffs and the looming July 10th deadline for existing Section 301 investigations.

Will June 24 be a modern-day Valentine’s Day for India and the US? For both nations, the discussions in Delhi on Tuesday will be crucial for the final ‘one per cent’ left to sew up before they are tied and knotted.

For India, while a BTA (Bilateral Trade Agreement) is all fine, it wouldn’t be too bad if the nuptials got a BFF clause written in. That ‘till-expiry-date-do-us-part’ would help if there is a preferential position vis-à-vis rival exporter nations. A sort of most-favoured nation status, but this one with real safeguards to ensure the ‘special friendship’ does not get crowded out in the plethora of competing nations, the likes of China, Vietnam and the Philippines included.

US trade representative Jamieson Greer’s India visit—he landed Monday night—is short but packed with talks both on Tuesday and Wednesday. It is hoped that the formal round of talks scheduled for Wednesday the 24th could just see both nations either jump over the final hurdle and go happily ever after, or get mired down in another round of excruciating bargaining.

What India is particularly careful while giving finishing touches to the deal are over what may be the future implications of recent developments back in America—the US Supreme Court striking down Trump’s tariff tirade, leading to the US President falling back on existing clauses like Section 301 to impose punitive duties, and specifically, the likely updation that the Trump Administration might just be making to 301 to weaponise it in future situations (the present clauses aren’t as stringent as the White House incumbent may have possibly liked, with its temporary durations).

In other words, India would like to ensure some sort of preferential treatment woven into this deal to future-proof it from whatever future tariffs an updated Section 301 might come up with and impose on countries. Meaning lesser duties compared to rivals.

While a trade deal was announced back in February, it still left many areas of contention untouched, and those are what are taking up most of the negotiators’ time. This includes usual suspects like agriculture imports from the US in general and GM-linked products (red sorghum and soybean oil) in particular. These two may just be pushed through, as the argument for these items is that they are mainly used as animal feed only.

However, Commerce Minister Piyush Goyal has been emphatic that dairy products are a line no one dares cross. India’s dairy sector is the biggest producer of milk in the world and employs lakhs, which will be in jeopardy if the trade deal lets in superior quality milk products from a heavily subsidised American dairy sector.

The US is also holding the clock over India’s head, with July 10 being the deadline for its present 10 per cent tariff under a Section 301 investigation into rule violations in countries that export to it. India presently is under a 10 per cent tariff, while July 10 passing by without a deal could see additional duties of 12.5 per cent imposed (if the related hearings rule against India). Goyal, however, has been brushing aside this point, declaring that “India does not negotiate under deadlines.”

India is also seeking future exemption for tariffs imposed under Section 232 (national security concerns) for items like steel, aluminium, copper, auto parts, etc. These items have not just acquired a strategic dimension in recent times; they are also a significant part of India’s exports to the US—they had been singled out by Trump for his additional 25 per cent tariff back during the dark days of his tariff tantrum last year.

While India had blinked when it came to digital tax, points like storing data of Indians (even if generated on American Big Tech platforms) in India, as well as the big touchy one, regulating online platforms, remain open for debate.

For India, keeping its governance supremacy on matters like digital data, as well as issues like buying Russian oil, which could boomerang politically on the present establishment, are matters best settled once and for all through an agreement in one go, rather than compromise now and then hope for the best in an uncertain future.

At the same time, the country’s financial system desperately needs the assurance a BTA in place could provide—jobs are in scarce supply, the rupee is performing badly and industrial core growth is at a multi-month low. Getting the deal worked out means a solid push to GDP growth rates, thanks to the solidifying and spawning of hundreds of thousands of jobs in sectors like textiles, footwear, marine products, chemicals as well as gems & jewellery, which form the bulk of India’s export to the US, which is not only one of the most lucrative export markets, but also India’s biggest trading partner.

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