A swift agreement is now a priority for the US, largely because it would immediately help unwind recently imposed US tariffs—some as high as 50%—that are currently squeezing Indian exporters. Srivastava suggests the deal’s rapid movement is due to Washington’s eagerness, providing necessary relief from the damaging tariffs that are hurting Indian exports. However, Indian officials are urged to remain firm on their “red lines” in sensitive sectors and to avoid incorporating any anti-China clauses that could compromise India’s crucial strategic autonomy.

Negotiators from both nations are grappling with familiar points of friction, particularly concerning agriculture. India remains highly protective of its large number of small farmers and its vital dairy sector, expressing strong caution regarding increased market access for potentially subsidized US competition through tariff cuts or tariff-rate quotas. This tension underscores the complex balancing act of opening markets while safeguarding the domestic agribusiness economy and millions of rural livelihoods.

Beyond traditional goods, significant friction points exist in the digital realm. The United States is typically pushing for binding commitments on cross-border data flows and data localization, as well as the treatment of digital products. Conversely, India favors a more flexible, “best-endeavor” language to retain domestic policy space over issues like e-commerce rules and FDI in multi-brand retail, areas that are sensitive to competition, consumer protection, and the regulation of large digital platforms.