India and the United States are set to resume trade negotiations on Tuesday in New Delhi, following a period of strain sparked by U.S. tariffs on Indian imports.
The talks follow President Donald Trump’s imposition of a 25% punitive levy on India starting August 27, doubling tariffs to 50% due to India’s Russian oil purchases amid the Ukraine conflict.
Trump’s recent conciliatory remarks and optimism about finalizing a deal have raised hopes for progress.
U.S. Trade Representative for South Asia, Brendan Lynch, will meet India’s chief negotiator, Rajesh Agarwal, for a one-day session.
This meeting serves as a precursor to the sixth round of bilateral talks, delayed from August due to disagreements over India’s agricultural and dairy market access.
Commerce Minister Piyush Goyal expressed confidence that initial deals could be finalized by November, citing a positive negotiation environment since March.
Trump described Prime Minister Narendra Modi as his “very good friend,” emphasizing ongoing efforts to address trade barriers.
Modi reciprocated, appreciating Trump’s positive view of India-US relations.
India’s exports to the U.S. fell to $6.86 billion in August from $8.01 billion in July, with total goods exports dropping to a nine-month low of $35.10 billion.
The trade deficit to $26.49 billion, but exporters warn the full tariff impact will emerge next month.
India rejects U.S. claims of unfair trade practices, noting Western nations also buy Russian oil, and remains firm on protecting its farmers and MSMEs by limiting American agricultural imports like corn and soybeans.
Modi reiterated this stance, vowing to safeguard farmers and fishermen.
U.S. Commerce Minister Howard Lutnick criticized India’s refusal to buy American corn, threatening market access restrictions.
India is diversifying export markets, engaging with the UK, Europe, Japan, and West Asia to offset tariff effects.
Recent Indian engagements with China and Russia, including Modi’s Beijing visit and interactions with Vladimir Putin, add complexity to the talks.
A planned U.S. visit in August was canceled due to unresolved agricultural issues.
Trump’s ambassador nominee, Sergio Gor, suggested tariff differences are close to resolution.
A senior U.S. official cautioned that India’s closed market and geopolitical issues pose ongoing challenges.
India’s consistent stance against duty concessions, as seen in deals with Australia and Switzerland, underscores its firm position.