US Likely to Seek Tariff Cuts, Regulatory Reforms in Trade Deal with India: GTRI Ira Singh

Ira Singh
Khabar Khabaron Ki,05 May’2025

The United States is expected to seek significant changes in India’s trade policies, including reductions in tariffs and regulatory reforms, as part of the ongoing bilateral trade negotiations, according to the Global Trade Research Initiative (GTRI).

In its latest analysis, GTRI stated that the U.S. demands in the agricultural sector are particularly sensitive, with calls to scale back India’s minimum support price (MSP) programs for key staples like rice and wheat. Washington is also expected to push for the removal of restrictions on genetically modified (GM) imports and a reduction in farm tariffs, which are currently among the highest globally.

“The U.S. considers India’s MSP regime as a trade-distorting support system,” GTRI Founder Ajay Srivastava reportedlt stated. “They are also pressing for access for GM products, which India continues to restrict citing biosafety and environmental concerns.”

On dairy imports, American negotiators argue that India’s certification norms—particularly its insistence on GM-free feed and facility registration—effectively block U.S. dairy products from entering the Indian market. India prohibits imports from animals fed with animal-derived feed, a restriction rooted in religious sensitivities, such as opposition to meat-fed dairy animals.

“India considers this policy non-negotiable,” Srivastava noted, underscoring the cultural and religious dimensions shaping India’s trade stance.

The report also highlights U.S. interest in easing restrictions on foreign direct investment in India’s e-commerce sector. American retail giants like Amazon and Walmart continue to face regulatory hurdles due to India’s ban on inventory-based e-commerce models operated by foreign-owned entities.

“India is unlikely to yield here easily,” Srivastava said. “The government wants to shield small domestic retailers from aggressive competition and also maintain regulatory sovereignty in this rapidly evolving digital marketplace.”

In the industrial segment, the U.S. has raised concerns about India’s licensing rules for remanufactured and secondhand capital goods. These include mandatory technical certifications, quantity restrictions, and the requirement that imported equipment must have a residual lifespan of at least five years. Washington argues that these measures are both burdensome and a barrier to trade.

“India insists these controls are necessary to prevent the dumping of outdated technology and to protect its growing domestic manufacturing base,” Srivastava added.