Just before his July 9 deadline, US President Donald Trump sent letters slapping tariffs on several countries, excluding India, which haven't made trade deals with the US. Trump said the US is close to making a trade deal with India. Trade negotiators from Washington and New Delhi held long-drawn negotiations, but disagreements over dairy and agriculture sectors remained the sticking points. Commerce Minister Piyush Goyal has said India won't make any deal under pressure of a deadline. Yet, as per media reports, a mini trade deal between the US and India is imminent and might be announced tonight. This would mean India and the US have agreed to go ahead with sectors and products where agreement could be reached. But the mini trade deal will not mean India's Trump challenge will vanish. While it can offer India significant benefits, it will buy a fragile peace with Trump because the problematic issues will remain and have to be negotiated.
On the surface, a mini trade deal may seem like a diplomatic breakthrough, but this reprieve might be temporary. The Trump doctrine of aggressive, transactional diplomacy means that India might continue to face erratic trade pressure from the US even after a short-term agreement is inked.
Also Read: How India can play hardball with Trump and win
Unresolved core disputes
At the heart of the stalled trade talks are India’s dairy and agriculture sectors, the areas that have remained politically sensitive and economically vital for the Indian government. The US has long demanded broader market access for its dairy and agricultural products, citing non-tariff barriers and regulatory restrictions as unfair protectionism. India, on the other hand, has made it clear that these sectors are non-negotiable.
Indian dairy, for instance, is heavily reliant on small farmers, and allowing US dairy, especially from hormone-treated and meat-fed cattle, into the Indian market could devastate domestic producers and will be culturally unacceptable. Similarly, agricultural subsidies and minimum support prices form the backbone of India's rural economy and food security strategy. These cannot be compromised without causing political and social unrest. Even if these issues are temporarily sidestepped in a mini trade deal, they remain ticking time bombs for future negotiations.
Trump’s tariff diplomacy as a pressure tactic
Trump has turned tariffs into a geopolitical weapon. From China to the EU to even traditional allies like Canada and Mexico, Trump has shown that he's willing to use tariff threats not just for trade imbalances but also for diplomatic leverage. India is no exception. In fact, Trump has repeatedly claimed that he threatened India with tariffs to deter it from going to war with Pakistan, a highly questionable but revealing statement which has been vigorously refuted by India.
This shows that trade under Trump is not just about economics, but about dominance and unpredictability. Even if a mini deal is signed now, it does not ensure lasting calm. Trump could very well return with fresh demands, unrelated to trade, and use tariff threats to enforce compliance, whether on strategic alignments, defense purchases, or even foreign policy decisions like India’s stance on Russia.
Perhaps the biggest challenge in dealing with Trump is the absence of predictability. His sudden moves or tweeting tariff threats at odd hours make it nearly impossible for long-term planning. For India, this means that even sectors that have not yet come under pressure could be dragged into future conflicts at any time. A mini deal might create short-term relief, but it is no shield against future policy reversals or impulsive trade actions.
Commerce Minister Piyush Goyal has publicly stated that India will not work under any deadline pressure. This is a strong and principled stance. But deadlines aren’t the only tools Trump uses. He is equally effective with ambiguity and sudden policy shifts. The absence of a formal deadline does not mean India will be free from coercive tactics. A tweet, a press conference or a sudden tariff hike can achieve what a deadline might fail to do. Moreover, India’s relative dependence on the US for exports, especially in the services and pharmaceutical sectors, makes it vulnerable to punitive actions, even if not directly related to dairy or agriculture.
India’s foreign policy has historically emphasized strategic autonomy. But under Trump’s transactional worldview, strategic autonomy can be seen as resistance. Whether it’s India buying oil from Iran, procuring defense equipment from Russia or taking a neutral stance in US-China rivalry, Trump has often viewed such moves as acts of defiance. This will put India in a difficult position. Any attempt to assert its national interest in global affairs could be punished through tariffs or trade threats. A mini deal, therefore, does not offer protection from the possibility of Trump’s coercive actions. "Trump's model isn't a free trade agreement, it's a YATRA - Yielding to American Tariff Retaliation Agreement," Global Trade Research Initiative (GTRI) Founder Ajay Srivastava has said.
A mini trade deal between India and the US, if announced, will be a welcome development for India, but it may still have the big task of building long-term economic resilience and diversifying its trade partnerships.
On the surface, a mini trade deal may seem like a diplomatic breakthrough, but this reprieve might be temporary. The Trump doctrine of aggressive, transactional diplomacy means that India might continue to face erratic trade pressure from the US even after a short-term agreement is inked.
Also Read: How India can play hardball with Trump and win
Unresolved core disputes
At the heart of the stalled trade talks are India’s dairy and agriculture sectors, the areas that have remained politically sensitive and economically vital for the Indian government. The US has long demanded broader market access for its dairy and agricultural products, citing non-tariff barriers and regulatory restrictions as unfair protectionism. India, on the other hand, has made it clear that these sectors are non-negotiable.
Indian dairy, for instance, is heavily reliant on small farmers, and allowing US dairy, especially from hormone-treated and meat-fed cattle, into the Indian market could devastate domestic producers and will be culturally unacceptable. Similarly, agricultural subsidies and minimum support prices form the backbone of India's rural economy and food security strategy. These cannot be compromised without causing political and social unrest. Even if these issues are temporarily sidestepped in a mini trade deal, they remain ticking time bombs for future negotiations.
Trump’s tariff diplomacy as a pressure tactic
Trump has turned tariffs into a geopolitical weapon. From China to the EU to even traditional allies like Canada and Mexico, Trump has shown that he's willing to use tariff threats not just for trade imbalances but also for diplomatic leverage. India is no exception. In fact, Trump has repeatedly claimed that he threatened India with tariffs to deter it from going to war with Pakistan, a highly questionable but revealing statement which has been vigorously refuted by India.
This shows that trade under Trump is not just about economics, but about dominance and unpredictability. Even if a mini deal is signed now, it does not ensure lasting calm. Trump could very well return with fresh demands, unrelated to trade, and use tariff threats to enforce compliance, whether on strategic alignments, defense purchases, or even foreign policy decisions like India’s stance on Russia.
Perhaps the biggest challenge in dealing with Trump is the absence of predictability. His sudden moves or tweeting tariff threats at odd hours make it nearly impossible for long-term planning. For India, this means that even sectors that have not yet come under pressure could be dragged into future conflicts at any time. A mini deal might create short-term relief, but it is no shield against future policy reversals or impulsive trade actions.
Commerce Minister Piyush Goyal has publicly stated that India will not work under any deadline pressure. This is a strong and principled stance. But deadlines aren’t the only tools Trump uses. He is equally effective with ambiguity and sudden policy shifts. The absence of a formal deadline does not mean India will be free from coercive tactics. A tweet, a press conference or a sudden tariff hike can achieve what a deadline might fail to do. Moreover, India’s relative dependence on the US for exports, especially in the services and pharmaceutical sectors, makes it vulnerable to punitive actions, even if not directly related to dairy or agriculture.
India’s foreign policy has historically emphasized strategic autonomy. But under Trump’s transactional worldview, strategic autonomy can be seen as resistance. Whether it’s India buying oil from Iran, procuring defense equipment from Russia or taking a neutral stance in US-China rivalry, Trump has often viewed such moves as acts of defiance. This will put India in a difficult position. Any attempt to assert its national interest in global affairs could be punished through tariffs or trade threats. A mini deal, therefore, does not offer protection from the possibility of Trump’s coercive actions. "Trump's model isn't a free trade agreement, it's a YATRA - Yielding to American Tariff Retaliation Agreement," Global Trade Research Initiative (GTRI) Founder Ajay Srivastava has said.
A mini trade deal between India and the US, if announced, will be a welcome development for India, but it may still have the big task of building long-term economic resilience and diversifying its trade partnerships.
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