India eyes ‘big, beautiful’ trade deal with US but draws red lines on Agriculture, Dairy

As the clock ticks toward the July 9 deadline to avert punitive US tariffs, Finance Minister Nirmala Sitharaman has expressed India’s eagerness for a sweeping trade pact with Washington — but not at the cost of its farmers and dairy sector.

“Yes, we would love to have an agreement — a big, good, beautiful one. Why not?” Sitharaman said in an interview with The Financial Express, responding to US President Donald Trump’s recent remarks on an imminent interim bilateral trade agreement (BTA) that would “open up” Indian markets.

But she drew a clear line in the sand: agriculture and dairy remain “very big red lines” where New Delhi is exercizing “a high degree of caution.”

Sitharaman stressed that striking trade deals with major economies aligns with India’s growth vision of becoming a developed nation — Viksit Bharat — by 2047. “The sooner we have such agreements with strong economies, the better they will serve us,” she said.

Reforms on the horizon: Simplified GST, nuclear push, private investment revival

The Finance Minister laid out a wide-ranging economic roadmap featuring second-generation reforms, promising a simplified and more consumer-friendly Goods and Services Tax (GST) structure, structural energy shifts toward modular nuclear reactors, and targeted support to merchandise exports.

She confirmed that a reduction in the weighted average GST rate is under serious consideration. “The expectation is that it will come down… If the rates are low enough, they can expand the base and still ensure buoyancy,” Sitharaman said, signaling a consumption-friendly shift.

To ensure long-term growth, she urged all states to improve their investment climate. “Otherwise, investments that were coming to some parts of the country cannot reach others,” she cautioned.

Private sector gains momentum, urban sentiment rebounds

On concerns about private investment, Sitharaman said the tide is turning. “In the last six months, there is a clear sign that private investments and capacity expansions are happening,” she noted, attributing the shift partly to surplus cash reserves and improved consumer sentiment following recent income tax reliefs.

She also addressed the slow growth in bank deposits — particularly low-cost CASA deposits — acknowledging the challenge as retail savers increasingly turn to stock markets. “There will be some kind of attempt by the banks to improve on this,” she added.

Nuclear energy law, labor codes, and tax neutrality for exports

Looking ahead, Sitharaman revealed plans to amend nuclear energy laws to facilitate the rollout of small modular reactors, positioning them as a cornerstone of India’s next energy transition. “India needs to ramp up its basic energy base,” she said, citing the limits of solar and wind energy as standalone solutions.

On labor reforms, the Minister reiterated that “there is no going back” on the three labor codes, asserting that many states are actively embracing them.

She also acknowledged that taxes embedded in exports are still not fully neutralized and promised additional measures to support merchandise exporters.