The United States and India are advancing negotiations for a potential trade agreement that encompasses 19 categories, including agricultural goods, ecommerce, data storage, and critical minerals.

This progress follows a meeting on April 21, 2025, between US Vice President JD Vance and Indian Prime Minister Narendra Modi in New Delhi.

The recently finalized terms of reference for the agreement include trade in goods and services, anti-corruption measures, and rules of origin.

Negotiations are expected to be challenging, particularly regarding tariff reductions on US agricultural products, which face resistance from Indian farmers.

Talks will also address India’s data localization policy and regulations affecting US technology firms such as Google and Amazon.

Trade between the two nations reached US$127.6 billion last year, with both sides aiming to increase this figure to US$500 billion by 2030.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ The agricultural balancing act reveals structural challenges beyond tariffs

India’s agricultural protectionism reflects a fundamental economic structure that complicates trade negotiations with the US.

While the US faces tariffs up to 150% on agricultural exports to India, the disparity stems from India’s transformation from a food-deficient nation to an agricultural producer protecting millions of smallholder farmers1.

This structural reality creates asymmetric negotiation positions: India’s average tariff on US agricultural imports is 37.7%, compared to just 5.3% on Indian agricultural goods entering the US2.

The recent Indian offer to reduce tariffs on specific products like almonds and cranberries represents a tactical compromise rather than wholesale market opening3.

This approach reflects India’s strategic balancing of farmer protection and international trade relationships, as any significant agricultural market opening could affect the livelihoods of India’s substantial farming population.

2️⃣ Data localization emerges as a powerful bargaining chip in modern trade negotiations

India’s evolving stance on data localization has become a central element in the trade negotiations, representing the growing importance of digital governance in international commerce.