Trust deficit and trade barriers: Why the India–US trade deal remains stuck, Donald Trump likely to…

Policymakers in the United States had been quite unhappy with what they saw as India’s protectionist policies in the trade sector, including high tariffs, complex standards, and regulatory uncertainty.

Washington: The year 2025 was a challenging year for India–US trade relations. Both countries held negotiations to develop an initial framework trade agreement that was expected to lay the groundwork for a broader Bilateral Trade Agreement (BTA), but these efforts failed to yield any concrete outcome. To recall, Donald Trump had imposed a 25 tariff on Indian products, which he later increased to 50 percent citing India’s purchase of Russian oil.

The slew of meetings and talks ended in disappointment, driven by geopolitics, economic protectionism, and Washington’s perception that India stood in the way of America’s shifting priorities. The 50 percent tariff imposed by the United States has had a direct impact on India’s textile, leather, and footwear industries.

Exporters warned of a sharp fall in shipments, but India stood its ground and did not bow to tariff pressure from Trump, emphasizing its sovereignty. As a result, with Donald Trump set to complete one year as US president on the 20th of this month, it has become evident that the United States may not actually want a trade deal with India.

Donald Trump upset with India. Here’s why

Policymakers in the United States had been quite unhappy with what they saw as India’s protectionist policies in the trade sector, including high tariffs, complex standards, and regulatory uncertainty. Earlier they tried to address these issues gradually, but the Trump administration adopted a much tougher stance. Experts are of the opinion that the Trump government is not happy with India’s policy of maintaining good relations with both US and Russia. This perception significantly eroded trust in India–U.S. relations.

Here are some of the key details:

• Agriculture and digital trade remain the biggest stumbling blocks in India–US trade relations.
• The United States is pressing India to open its market to genetically modified (GM) soybeans and corn
• This demand comes at a time when China has reduced its purchases of these commodities.
• India, however, has refused, citing domestic sensitivities and strong global demand for its non-GM products.
• On digital trade, the United States supports making the WTO’s e-commerce moratorium permanent
• India, on the other hand, wants to retain policy flexibility for the future.
• Washington views this stance as protectionist and contrary to innovation and market access.