US India tariff talks complicated by dispute over agricultural markets

President Donald Trump said on Wednesday that the United States would impose a 25% tariff on Indian goods, citing New Delhi’s high tariffs and tough non-monetary trade barriers. The key sticking point in the tariff reduction talks has been the issue of agricultural goods, Reuters reported.

India has resisted U.S. demands to open its agricultural markets, saying such moves would hurt millions of poor farmers. New Delhi has historically excluded agriculture from free trade agreements to protect domestic sources of income for local farmers.

India imposes an average tariff of 39% on imported agricultural products, compared with 5% for the United States, with some tariffs as high as 50%. The Trump administration has repeatedly cited the tariff as a major obstacle to deeper trade ties with India.

Tariff reductions on corn, soybeans, wheat and ethanol remain on the table with the Indian government, as Indian officials cite the risks of subsidizing American agricultural products. But Washington wants greater access to Indian markets, and also wants India to lower non-tariff barriers and reform rules on patents, digital trade and data flows.

U.S. manufacturing exports to India, estimated to be worth nearly $42 billion by 2024, are subject to high tariffs: from 7% on wood products and machinery to 15-20% on footwear and transportation equipment, and almost 68% on food.

Tags: soybean, wheat, India, USA, ethanol, duties, corn