With no word still on whether his administration will sign an interim trade deal with India before the reciprocal tariff pause runs out July 9, President Donald Trump has said the US has begun the process of informing countries about the reciprocal tariffs they must pay, and that he has already signed 12 letters scheduled to be dispatched Monday.
Trump, however, stated that the reciprocal tariffs would come into effect August 1, indicating a potential extended window for negotiations with countries, including possibly India, which have not struck a deal with the US before the July 9 deadline. The US had originally announced a 26 per cent reciprocal tariff on India.
Trump told reporters: “I signed some letters and they will go out on Monday, probably 12. Different amounts of money, different rates of tariff.” He said the names of the countries that would be receiving the letters would only be revealed Monday.
A government official told The Indian Express that agriculture has been a major sticking point in negotiations, particularly because India has adopted an unwavering stance on this sector.
India, however, has shown willingness to reduce duties across a broad range of tariff lines. Traditionally, India has been defensive in trade pacts concerning agriculture.
Indian negotiators, led by Chief Negotiator and Special Secretary Rajesh Aggarwal, returned Friday after nearly a week of talks with the US.
An official indicated that the likely interim deal will involve only goods, as services and labour issues are not currently part of the negotiations.
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While India is seeking greater market access for its textiles, leather and footwear, the US is pushing for access to India’s agricultural and dairy markets, a major hurdle since Indian farmers often operate on small land parcels with limited technological support. In contrast, the US has demanded India to drop GM regulation.
There is significant resistance to genetically modified (GM) crops in India. Only one GM crop, Bt cotton, is approved for cultivation. No GM food crop is commercially grown, although experimental trials continue. However, imports of GM soybean oil and canola oil are permitted.
A 2013 report by the European Network of Scientists for Social and Environmental Responsibility (ENSSER) emphasised that many studies deeming GM foods safe were industry-funded and that long-term, independent studies were lacking.
New Delhi-based think tank GTRI said: “Environmental studies have shown that widespread use of Bt crops can lead to pest resistance, such as in the pink bollworm, and pose risks to non-target species such as monarch butterflies, as suggested in a 1999 Nature study. Additionally, the overuse of glyphosate with herbicide-tolerant GM crops has led to ‘superweeds’ and increased herbicide use.”
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Coming in way
Disagreements over sensitive sectors such as agriculture and dairy have added to the uncertainty of an interim trade deal between India and the United States before the end of the tariff pause on July 9. India has been resisting US demands for greater access in these sectors.
The GTRI said that GM and non-GM crops may intermingle at various stages of the supply chain – during transport, storage or processing. “Once GM material enters, there is a high risk it could leak into local farming systems or processed food chains, posing risks to food safety, environmental integrity, and India’s export reputation – especially in GM-sensitive markets such as the EU,” the think tank warned.
It said the import of GM products, like animal feed, could negatively affect India’s agricultural exports to the EU which enforces strict GM-labelling rules and faces strong consumer opposition to GM-linked products.
Although GM feed is permitted, many European buyers prefer fully GM-free supply chains. India’s fragmented agri-logistics and lack of segregation infrastructure increase the likelihood of cross-contamination and trace GM presence in export consignments. This could result in shipment rejections, higher testing costs, and erosion of India’s GM-free image, particularly in sectors like rice, tea, honey, spices and organic foods, the GTRI said.
