The Trump administration has been here before. During his first term, negotiators worked with India in an attempt to secure a bilateral trade deal similar to agreements the administration was able to negotiate with Japan and South Korea.
The deal would have centered around three areas increased access to Indias agricultural, information technology and medical devices markets. But as talks dragged on and the scope of the deal shrank, Trump scrapped the plan.
They got very close, really, really close to concluding a first-ever bilateral trade deal, said Mark Linscott, a former negotiator for USTR who was involved in negotiations with India. This time around its clearly a priority for both sides &. Its the agreement that got away.
Much of the challenge has been opening Indias agricultural market, particularly when it comes to the genetically modified crops grown in the U.S. and dairy products. India, as a majority Hindu country, has significant religious concerns about the import of byproducts from cows.
While the Biden administration was able to secure increased access for specialty agriculture products like nuts and cranberries, India is reluctant to make deals that undercut its own farmers.
Any early deal with India would likely focus on products that are not readily accessible in the country, like fruits and vegetables, nuts, alfalfa and potentially ethanol.
But, despite the political tension in India, the U.S. agriculture industry has continued its long-standing push to open the countrys fast-growing market to U.S. products, particularly dairy.
A deal on dairy is still proving elusive, even as the U.S. has shifted its strategy to lower tariffs and simplify the certificates necessary to allow more dairy products into the country.
Theyve been pretty clear all along that dairy was going to be a heavy lift, said a person close to the negotiations.
Any deal announced by July 9 is likely to just be the first phase of an ongoing effort to secure a substantial bilateral trade agreement with India a process that could stretch on for at least another year, those close to the discussions say.
Linscott, who negotiated with India for USTR in the first Trump administration, said the administration knows the U.S. will likely have to make some concessions in order to secure a larger deal, putting the talks in a different bucket than other deals the U.S. is seeking to negotiate.
India is the fourth largest economy in the world now, will soon be the third largest economy in the world, and is a critical strategic partner in the Indo-Pacific, Linscott said. I think all those factor in a bit in the overall negotiating dynamics.
Phelim Kine contributed to this article.
