Washington could demand sweeping reforms in India’s agricultural, e-commerce, ethanol blending and government procurement policies, apart from tariff reductions, as part of the ongoing bilateral trade agreement talks, according to Global Trade Research Initiative.
“Agriculture is among the most contentious sectors. The U.S. demands major reforms — including scaling back India’s minimum price support (MSP) programs for crops like rice and wheat, removing restrictions on genetically modified (GM) imports, and lowering farm tariffs,” said GTRI Founder Ajay Srivastava.
However, India has fiercely defended its agricultural policies, with a belief that dismantling MSP and procurement programs would destabilize rural livelihoods in a country where half the population depends on agriculture.
Even in dairy, the US argues that India’s GM-free feed certification and facility registration protocols effectively bar American dairy imports. Indian rules prohibit imports from animals fed with animal-derived feed—for example, butter from a cow fed meat—due to religious sensitivities. India considers this policy non-negotiable.
Apart from agriculture, US is also likely to push for its retail giants like Amazon and Walmart, who face roadblocks due to India’s restrictions on foreign-owned inventory-based e-commerce. Washington seeks to overturn these curbs, enabling direct sales to Indian consumers.
Washington is also challenging India’s approach to pharmaceutical patents. Section 3(d) of India’s Patents Act bars patents for minor variations of existing drugs unless significant therapeutic benefits are demonstrated. The US pharmaceutical industry claims this policy stifles innovation.
Digital trade has emerged as a new front. The U.S. criticizes India’s 2018 regulation mandating the local storage of payment data, arguing that it raises costs and disadvantages foreign firms.
Further, the US criticizes India’s cumbersome licensing requirements for remanufactured and secondhand capital goods, calling the process costly and slow. India mandates technical certificates, enforces quantity restrictions, and demands a residual life guarantee of at least five years for imports.
Srivastava added that these contours of negotiations have been derived from US National Trade Estimate Report for 2025, which can be used as a point to arrive at what Washington is likely to demand.
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