India and the United States are working towards finalizing a bilateral trade agreement (BTA) within the next eight months, and it sounds like the US is going to be asking for some significant concessions from India.
Specifically, the US is expected to push for greater market access in India for agricultural and dairy products, ethanol, and medical devices. According to a Business Standard report, a former commerce ministry official who was involved in previous negotiations with the Trump administration anticipates that the US won't be satisfied with just limited tariff cuts on things like motorcycles and bourbon whiskey.
What might India ask for in return? The expectation is that India will likely request the US to drop duties on labor-intensive products such as textiles, leather, gems, and jewelry, potentially bringing them down to zero from the current 5-7%.
Looking at ethanol, the US Trade Representative (USTR) noted in its 2024 report that India restricts the import of ethanol for fuel use, despite having ambitious targets for blending ethanol with gasoline1. They also pointed out that India requires import licenses for biofuels, which can be a barrier.
The White House also released a factsheet highlighting what they see as a lack of reciprocity in trade. They emphasize that while the US has one of the most open economies, many trading partners keep their markets closed to US exports1. For example, the average US tariff on agricultural goods is 5%, while India's is 39%. Also, India charges a 100% tariff on US motorcycles, while the US only charge 2.4% on Indian motorcycles1. The US also charges a tariff on ethanol at 2.5%, while Brazil charges 18%.