India and the United States resumed discussions on a proposed bilateral trade agreement between the two countries in New Delhi on Tuesday, with the Union commerce ministry describing the talks as “positive and forward looking”, covering various aspects of the trade deal.
However, observers are wary that any significant breakthrough could be difficult unless Washington withdraws its additional 25 per cent duty on Indian goods linked to Russian oil imports.
The meeting was led by Rajesh Agarwal, special secretary in the department of commerce, and Brendan Lynch, chief negotiator, India-US Bilateral Trade Agreement.
Lynch, who is also the assistant US Trade Representative for South and Central Asia, arrived in New Delhi on Monday evening for the day-long talks, marking the first high-level US trade engagement since Washington imposed the duties in August.
The commerce ministry said the two sides have agreed to “intensify efforts to achieve early conclusion of a mutually beneficial trade agreement”.
So far, five rounds of negotiations have been held, and the talks for the sixth round, which were scheduled from August 25-29, were postponed.
India faces 25 per cent reciprocal tariffs on its exports to the US since August 7. The dispute escalated on August 27, when Washington imposed an additional 25 per cent penalty, citing India’s continued purchase of Russian crude.
Commerce ministry officials indicated that Tuesday’s meeting should not be viewed as the 6th round of negotiations, but a precursor to it.
The meeting took place within days of Prime Minister Narendra Modi warmly reacting to US President Donald Trump’s positive assessment of trade ties between the two countries. India has earlier defended purchasing Russian crude oil, saying it was driven by national interest and market dynamics.
According to the Indian think tank Global Trade Research Initiative (GTRI), this oil-linked tariff remains the “core roadblock” to the trade deal. In a September 4 filing before the US Supreme Court, the Trump administration explicitly cited India’s Russian oil imports to justify retaining tariff powers. Rolling back the duty now, GTRI noted, would weaken Washington’s legal case, making any relief unlikely.
Despite the hurdles, India has signalled its willingness to cut tariffs on over 95 per cent of US industrial exports. However, New Delhi remains firm on protecting agriculture, which the government views as livelihood issues for nearly 700 million farmers. India has also underlined that the interests of small businesses and dairy producers will not be compromised.