The world this week | India says no to trade deal under deadline pressure; Trinidad & Tobago backs Delhi for UNSC; Gaza ceasefire soon

As Indian trade negotiators returned from the US on Friday, a government official described sustained access for labour-intensive goods (such as textiles and footwear), auto component exports, and steel as key interests in the India-US negotiations.

In addition, agriculture and dairy sectors, where India has drawn “very big red lines”, emerged as sticking points, with the US demanding access to the Indian market for genetically modified (GM) products. What are the other points of difference that averted a trade deal, and what are the future prospects? Let’s explore.

What India demands and why

India has drawn “red lines” around politically sensitive agriculture and dairy sectors and has imposed both tariff and non-tariff restrictions on certain goods, including corn, ethanol, and soybeans.

It has managed to shield its dairy sector because of at least two major reasons: one, the sector employs more than 80 million people, many of whom are smallholders; and two, there are concerns that foreign dairy products intended for food may be derived from animals fed with internal blood meal, a high-protein feed made from animal blood.

As far as soyabean and corn are concerned, it is argued that imports are unlikely to suit India’s soybean industry, which has a strong foundation in Madhya Pradesh and Maharashtra. Similarly, millers are not too pleased about importing genetically modified corn as a feedstock for fuel ethanol.

In addition, labour-intensive sectors such as textiles and footwear are among India’s top demands in trade negotiations. It has sought lower tariffs in the textile trade in the US, similar to those offered to other FTA partners.

India has also sought zero tariffs on electronic items exports, even as US President Donald Trump warned Apple of a 25 per cent tariff if it sold in the US iPhones built in India or anywhere else. Apple currently produces nearly 15 per cent of all iPhones in India, and plans to increase that to a quarter.

India also aims to remove the US’s additional duties on goods such as steel, aluminium, and auto components. In addition to the elimination of reciprocal tariffs, it has sought guarantees of no future tariffs.

Moreover, New Delhi is seeking that the Trump Administration maintain a “steady tariff differential” of 10-20 per cent between US tariffs on China and India, which is also a key reason to clinch the deal. This gives Indian traders an advantage over Chinese competitors and mitigates some of India’s structural downsides, including infrastructural bottlenecks, logistics woes, and high interest costs.

However, it may be noted here that this would hinge on how China leverages its dominance in rare earths to influence US tariff decisions. The growing concerns over Beijing’s dominance in resources vital to new technologies were underscored at the recent Quad Foreign Ministers’ meeting, where the grouping announced a Critical Minerals Initiative to “collaborate on securing and diversifying” supply chains.

What US insists on

The US has pushed hard for a broad-based opening of Indian sectors, from automobiles and whisky to agricultural items such as apples, corn and soya among others, as well as dairy.

It has demanded the removal of a crucial regulation regarding dairy to sell its genetically modified (GM) products, resulting in tense discussions and even triggering protests from voices back home.

The US eyes the Indian market amid a recent report by the US Department of Agriculture, which suggests that India’s consumption of animal products (milk, eggs, fish, and meat) is likely to increase with population growth and rising per capita GDP.

This could, in turn, boost demand for feed and create opportunities for US exports of these commodities (corn and soybeans) by the early 2030s, the report says.

Moreover, the US sees India as a large market for its corn, soyabean and cotton amid the decline in exports of these products to China, which was its largest corn importer at $5.2 billion in 2022.

Where interests align

Although India has said that the trade deal with the US will be signed when it is mutually beneficial, the two countries remain committed to more than double their bilateral trade to $500 billion by 2030.

India is said to focus on areas where it has a competitive edge. Indian officials have indicated that diversifying oil and defence procurement is in the country’s strategic interest, and that sourcing more from the US could significantly help bridge the goods trade gap.

India’s oil imports from the US have already jumped over 270 per cent year-on-year in the first four months of 2025. Moreover, in recent years, New Delhi and Washington have forged closer defence, technology, and diplomatic ties in a shared front against China.

There is greater receptiveness now within India’s policy circles to cut tariffs on some industrial goods, including automobiles, and some agricultural products of interest to Americans such as apples, almonds, walnuts, avocados and spirits. There is also more openness on the GM foods issue too.

The NITI Aayog, in its Working Paper, has proposed that India import GM maize and soybeans, with the former as a feedstock for ethanol production, and the latter to extract oil for domestic consumption. In both cases, it calls for the export of their byproducts in their entirety – distiller’s dried grains with solubles (maize) and de-oiled cakes and meals (soybean).

It also called for concessions on agricultural products from the US such as edible oils and nuts where domestic supply gaps exist, and duty concessions to boost high-performing exports such as shrimp, fish, spices, rice, tea, coffee, and rubber.

Additionally, the chances of India becoming the biggest market for the US are, perhaps, higher in cotton than in soyabean or corn. And it may be argued that duty-free imports of raw cotton can boost India’s textile and apparel exports to the US itself, which stood at $10.8 billion in 2024.

Notably, India-US trade negotiations have wrapped up for now, even as New Delhi strengthens its global diplomatic footprint.

PM Modi’s five-nation tour

Support for India’s permanent membership in the expanded United Nations Security Council (UNSC) and a shared commitment to fight terrorism are among the announcements made during Prime Minister Narendra Modi’s visit to Trinidad and Tobago, the first by an Indian Prime Minister since 1999.

The two countries inked six agreements to boost cooperation in several sectors, including infrastructure and pharmaceuticals, following talks between Prime Minister Modi and his counterpart from Trinidad and Tobago, Kamla Persad-Bissessar.

The two leaders also delved into pressing global issues and reaffirmed the need for comprehensive reforms in the United Nations, including expansion of the UN Security Council, to better reflect current realities. The Caribbean nation also extended support to India’s membership in the expanded UNSC.

 

Modi and Bissessar called for dialogue and diplomacy as the way forward amid rising geopolitical tensions and global conflicts, and underlined the need for greater cooperation to deal with contemporary challenges such as climate change, disaster management, and cybersecurity.

Prime Minister Modi also lauded the contribution of Indian-origin people to Trinidad and Tobago’s development journey, and announced a decision to issue Overseas Citizenship of India (OCI) cards up to the sixth generation of the Indian diaspora in the country, where over 40 per cent of the population is of Indian origin.

Earlier on Friday, the Prime Minister addressed the parliament of the Caribbean nation and spoke about the cricket connection between the two countries. He also reiterated his offer to train aspiring young women cricketers from Trinidad and Tobago in India.

PM Modi expressed appreciation for Trinidad and Tobago’s strong support and solidarity to the people of India in the wake of the Pahalgam terror attack, as the two leaders reaffirmed their commitment to fight terrorism in all its forms and manifestations.

Modi is currently on a five-nation tour, which began with his visit to Ghana where he was honoured with Ghana’s national award, ‘The Officer of the Order of the Star of Ghana,’ in recognition of his “distinguished statesmanship and influential global leadership”.

Four Memorandums of Understanding (MoUs) were signed, including in the areas of cultural exchange and traditional music. In his joint press statement following talks with John Mahama, the President of Ghana, Prime Minister Modi announced that they have decided to give India-Ghana ties the form of a Comprehensive Partnership.

After Trinidad and Tobago, PM Modi has reached Argentina for the next leg of his tour. Later, he will attend the BRICS Summit in Brazil, and visit Namibia on his return.

Trump frustrated with Putin as Russia-Ukraine war drags on

Russia launched the largest aerial assault on Ukraine in the over three-year long war amid reports that Moscow has been using banned chemical weapons in Kyiv, while US President Donald Trump voiced frustration over Russian President Vladimir Putin’s failure to end the fighting.

Russian forces have used increasing numbers of drones to target Ukrainian cities, with a record total of 539 drones and 11 missiles deployed against Kyiv on July 4, Reuters reported, citing the Ukrainian air force.

Russia also downed dozens of Ukrainian drones in widely dispersed parts of the country, including two near the second-largest city of St Petersburg.

Meanwhile, Dutch and German intelligence agencies said Russia’s use of chemical weapons in this war is “becoming more normalised, standardised, and widespread”, with Dutch Defence Minister Ruben Brekelmans calling for tougher sanctions against Moscow, reported Reuters.

The US first accused Russia of using chloropicrin, a chemical compound more toxic than riot control agents and first used by Germany during World War I, in May last year. Ukraine also alleges thousands of instances of Russian chemical weapons use.

Hours after Thursday’s attack by Russia, Ukrainian President Volodymyr Zelenskyy had a phone call with Trump, following which the US President said Ukraine would need Patriot missiles for its defence, Reuters reported.

Commenting on the prospect of a ceasefire, Trump said, “It’s a very tough situation… I was very unhappy with my call with President Putin. He wants to go all the way, just keep killing people – it’s no good.”

Russia invaded Ukraine in February 2022, claiming it was needed to protect Russian-speaking civilians in eastern Ukraine and prevent the country from joining the North Atlantic Treaty Organization (NATO).

Notably, Trump has ruled out the possibility of Ukraine joining NATO and even halted shipments of weapons and military aid to it. Since 2022, every NATO summit has committed to aiding Ukraine in its war against Russia. Most NATO countries view Russia as a direct and immediate threat.

Gaza ceasefire likely next week

All the while, Israel continues to kill starving Palestinians as Hamas said it is ready to start talks “immediately” on a US proposal for a 60-day ceasefire, prompting US President Trump to say there could be a deal by next week.

At least 50 Palestinians were killed in Gaza as Israeli forces again target people waiting for food, Al Jazeera reported, while the UN said on July 5 that it had recorded at least 613 killings both at aid points run by the US- and Israeli-backed Gaza Humanitarian Foundation (GHF) and near humanitarian convoys run by other relief groups, including the UN.

The United Nations  has criticised the GHF, which began distributing aid at the end of May following a three-month Israeli blockade on Gaza, for bypassing the UN-led system and violating humanitarian impartiality rules.

Meanwhile, Hamas responded in “a positive spirit” to the Gaza ceasefire proposal, brokered by the US and mediated by Egypt and Qatar. Trump had earlier said that Israel had agreed “to the necessary conditions to finalise” the ceasefire, which envisages a release of hostages and negotiations on ending the conflict.

 

According to Gaza’s Health Ministry, at least 57,268 people have been killed and 135,625 wounded in Israel’s devastating war on Gaza since October 2023, when Hamas attacked Israel, killing over 1,100 people and taking 251 hostage.

In the meantime, the West Bank, occupied by Israel since the Six-Day War in 1967, has become a ‘big prison’ as Israel fences it in, Reuters reported.

Walls and checkpoints erected by Israeli forces have long been a part of day-to-day life for the nearly 3 million Palestinian residents of the West Bank. But many now say that a dramatic increase in such barriers since the start of the war in Gaza has put towns and villages in a state of permanent siege.

Experts like Talmiz Ahmad, a former ambassador to Oman, the UAE and Saudi Arabia, had underlined a number of provocations in the run up to the October 7 attack by Hamas, which included the surge in attacks on Palestinians in the West Bank.

Send your feedback and ideas to ashiya.parveen@indianexpress.com.