US-India trade talks centre on corn and soybean access

US President Donald Trump said this week he spoke with Indian Prime Minister Narendra Modi mainly about trade, and that Modi had assured him India would limit its oil purchases from Russia, reported Reuters. 

After the United States sanctioned Russia's top oil producers on Wednesday, Indian refiners - major buyers of cheap Russian oil - said they are set to sharply cut imports, potentially clearing a key hurdle to a US-India trade deal.

Why India wants a trade deal with the USA

India faces steep 50% tariffs on its exports to the United States - with half of the duties aimed at punishing Russian oil purchases - putting pressure on key industries including textiles, jewellery, seafood, leather, and engineering goods that employ millions of people.

Some reports say the United States could cut tariffs on Indian imports to 15–16% from 50%, with the deal likely to hinge on energy and agriculture.

What concessions is the US pressing India to make?

Corn and soybeans have figured prominently in the negotiations, with the United States eager to sell these two agricultural products to India.

India has increasingly turned to corn to boost ethanol output, but its rules bar ethanol made from imported grains and prohibit genetically modified (GM) food crops. The United States mostly grows GM corn, though some US farmers also produce non-GM varieties.

The United States is pressing India to allow corn imports, arguing that ethanol made from US corn would be used solely for blending with gasoline and not enter Indian agriculture.