After weeks of tension, the India-US trade negotiations have resumed in New Delhi, signaling a shift in Washington’s tone. The talks come after the US imposed steep 50% tariffs on Indian goods last month, putting bilateral trade ties under pressure. In a surprising turn, the US is now stepping back from its earlier sweeping demands for access to India’s agricultural and dairy markets. Instead, Washington is focusing on niche exports such as premium cheese and US-grown corn — a move seen by experts as a significant de-escalation in the ongoing trade dispute.
A Shift in Washington’s Strategy
When US President Donald Trump first imposed tariffs, it was seen as an aggressive move to pressure India into granting larger market access. However, the strategy appears to have backfired, leading to growing dissatisfaction among US farmers and exporters. Analysts suggest that the latest visit by a trade delegation from Washington represents a more conciliatory approach, indicating that the US does not want to jeopardize long-term ties with one of the fastest-growing economies in the world.
According to reports, the US team has made concessions by dropping its demand for broad access to India’s dairy sector, which had long been a sticking point in negotiations. Instead, the US has narrowed its focus to high-value niche dairy products, such as blue cheese, artisanal cheese, and powdered cheese, which cater to a small but growing urban Indian market.
US Trade Demands: Then vs Now
| Aspect | Earlier Stance (Before Tariffs) | Current Stance (After Talks Resumed) |
|---|---|---|
| Dairy Market Access | Sweeping access to India’s dairy sector, including milk, yogurt, and mass-market products | Focus only on premium cheese and niche dairy products (blue cheese, artisanal cheese, powdered cheese) |
| Agricultural Imports | Broad push for agricultural exports to India | Limited to US-grown corn, exploring potential for ethanol production rather than human consumption |
| Negotiation Tone | Aggressive – tariffs imposed to pressure India into compliance | Conciliatory – delegation sent to New Delhi with concessions |
| Political Messaging | Public criticism and tough rhetoric from Trump’s advisers | Softer messaging; focus on building long-term partnership |
| Strategic Goal | Immediate market penetration and tariff rollback | Long-term engagement, balancing trade and geopolitical interests |
This table highlights how Washington’s stance has shifted from a hardline approach to a more practical and cooperative one, setting the stage for meaningful progress in the negotiations.
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India’s Steady Response
Throughout the tariff standoff, India has maintained a measured approach. Prime Minister Narendra Modi, while reiterating his support for local farmers through his “swadeshi” (self-reliance) push, did not publicly escalate tensions or retaliate with harsh rhetoric. India’s strategy seems to have been to wait out the US pressure campaign, a move that now appears to be paying dividends.
For India, the dairy sector remains politically and economically sensitive. The country’s massive network of small-scale dairy farmers depends on domestic demand for survival, and opening the market to foreign milk and yogurt would risk destabilizing their livelihoods. However, since premium cheese and other niche dairy items make up only 2–5% of total demand, India may be more willing to negotiate limited access in this category.
The Corn Conundrum
Beyond cheese, Washington is also urging India to purchase US-grown corn. But this presents its own challenges. Most US corn is genetically modified (GM), which India does not currently permit for either import or cultivation. There are concerns about potential health impacts and ecological risks associated with GM crops.
Moreover, the timing of such a move could prove politically risky for New Delhi, as Bihar, India’s third-largest maize-producing state, heads into elections. Allowing cheap GM corn imports could be seen as hurting local farmers’ incomes, potentially leading to political backlash.
One possible compromise could involve allowing GM corn imports strictly for ethanol production rather than human consumption. This would provide India with a boost for its clean energy transition while safeguarding consumer safety and domestic farmers’ interests.
Why the US Blinked
A key question arises: why has the US softened its stance? The answer lies in the economic pressures faced by American farmers, who form a crucial part of Donald Trump’s support base.
The ongoing US-China trade war has already taken a toll on American agriculture. With granaries overflowing with unsold soybeans and corn, US farmers have been struggling with falling prices and reduced exports. China, once the largest buyer of American soybeans, has drastically cut imports and turned to Brazil and other suppliers.
By resuming talks with India and seeking even limited market access, the US is looking to create new demand avenues for its agricultural produce. This recalibration reflects Washington’s recognition that maintaining positive trade relations with India is essential — both economically and strategically.
Geopolitical Considerations
Beyond trade numbers, the geopolitical dimension of India-US relations cannot be ignored. As a rising power in Asia, India is seen as a crucial counterweight to China’s growing influence in the region. Strengthening trade ties and building economic interdependence is part of a larger strategic partnership that benefits both nations.
For India, engaging with the US ensures access to advanced technology, defense equipment, and investment flows that can accelerate its economic growth. For the US, India represents not only a lucrative market of 1.4 billion people but also a democratic partner in maintaining regional stability.
What This Means for India
The softening of the US position can be seen as a win for India’s negotiating strategy. By holding firm on its agricultural red lines while remaining open to dialogue, New Delhi has secured space to protect domestic interests without burning bridges with Washington.
Moreover, a limited deal focused on cheese and corn could set the stage for a broader trade agreement that addresses tariffs, digital trade, and market access in other sectors. Reducing tensions now could also pave the way for greater collaboration on energy, technology, and defense.
Looking Ahead
While the latest round of negotiations marks progress, several outstanding issues remain. These include tariffs on steel and aluminum, data localization requirements, e-commerce regulations, and intellectual property protections. Both sides will need to engage in sustained dialogue to resolve these differences.
However, the current developments are a positive sign that both nations are committed to avoiding a prolonged trade conflict. By choosing pragmatism over confrontation, India and the US can unlock significant economic potential and strengthen their strategic partnership.
Conclusion
The resumption of India-US trade talks, with Washington adopting a more pragmatic and focused approach, signals a turning point in the bilateral relationship. The US’s willingness to scale back its demands for sweeping market access and focus on niche exports like premium cheese and corn is not just a concession but a recognition of India’s economic importance and political sensitivities.
For India, this is an opportunity to strike a balanced deal that benefits its consumers, protects its farmers, and strengthens its global trade position. For the US, it is a chance to secure a stable and growing market for its agricultural goods while reinforcing a crucial strategic alliance.
If both sides continue on this path of constructive engagement, the outcome could be a win-win agreement that boosts economic growth, supports farmers on both sides, and solidifies the India-US partnership for years to come.
