Trade talks heat up with India, Europe
A train passes by farm fields during a recent harvest in Champaign County. Trade talks progressed recently with India and Europe, which could lead to deals to help find markets for the 2025 crops and other farm commodities. (Photo by Catrina Rawson of FarmWeek)
By TAMMIE SLOUP
FarmWeek
The U.S. and India have made progress toward a bilateral trade agreement, with both governments announcing the establishment of a roadmap for negotiations.
On April 21, Vice President JD Vance and India Prime Minister Narendra Modi announced the Terms of Reference (TOR) for a bilateral trade agreement between the United States and India. The announcement follows Vance’s recent trip to India.
The countries hope to seal a bilateral trade agreement this year and have set an ambitious target of more than doubling their bilateral trade to $500 billion by 2030.
The U.S. has long recognized significant trade barriers with India, with the U.S. running a $45.7 billion goods trade deficit with India in 2024 — a 5.1% ($2.2 billion) increase over 2023.
“I am pleased to confirm that USTR and India’s Ministry of Commerce and Industry have finalized the Terms of Reference to lay down a roadmap for the negotiations on reciprocal trade,” U.S. Trade Representative (USTR) Ambassador Jamieson Greer said. “There is a serious lack of reciprocity in the trade relationship with India. These ongoing talks will help achieve balance and reciprocity by opening new markets for American goods and addressing unfair practices that harm American workers. India’s constructive engagement so far has been welcomed and I look forward to creating new opportunities for workers, farmers and entrepreneurs in both countries.”
Goals for the United States include increasing market access, reducing tariff and non-tariff barriers and negotiating a robust set of additional commitments to ensure long-term benefits, according to USTR.
Vance’s and Modi’s statement reaffirmed the importance of the India-U.S. COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) initiative and highlights the progress in the negotiations for a bilateral trade agreement launched by President Donald Trump and Modi in Washington in February.
U.S. total goods trade with India was an estimated $129.2 billion in 2024. India’s average applied tariff is 17%, among the highest of the world’s largest economies, while the U.S. average applied tariff is 3.3%. India’s average applied tariff rate on agricultural products is 39% while the U.S. average applied tariff on agricultural products is just 5%.
In addition to tariffs, technical barriers to trade, regulatory barriers, and restrictions on access to the market in the services, industrial, and agricultural sectors also reduce U.S. exports to India.
On April 2, Trump imposed a 10% tariff on all countries and individualized reciprocal higher tariffs on nations with which the U.S. has the largest trade deficits to level the playing field.
“The TOR announcement with India is a critical step forward in negotiations with India to achieve reciprocal trade with one of our most strategic partners and deliver results to the American people,” according to a USTR fact sheet.
Trade deal with Europe?
Trump and Italy Prime Minister Giorgia Meloni were optimistic about a trade deal following a White House meeting April 17.
“There will be a trade deal, 100%,” Trump said. “Of course there will be a trade deal. They want to make one very much, and we are going to make a trade deal, I fully expect it, but it will be a fair deal.”
Meloni is the first European leader to visit Washington since Trump imposed, then paused, 20% tariffs on imports from the European Union.
While she can’t negotiate on behalf of the entire 27-member bloc, Meloni told reporters, “I’m sure we can make a deal.” European goods are still subject to Trump’s 10% global tariff.
This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.