India, U.S. Resume Trade Talks in New Delhi Amid Tariff Tensions

India and the United States have resumed trade negotiations today in New Delhi in an effort to resolve tensions stemming from recent U.S. tariffs. The talks follow recent punitive duties imposed by Washington, particularly over India’s ongoing purchases of Russian oil. These discussions are seen as a critical step toward salvaging the proposed bilateral trade agreement (BTA) between the two countries. 

Key Participants & Context

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The U.S. delegation is being led by Brendan Lynch, U.S. Trade Representative for South Asia, while Rajesh Agarwal, a senior Indian Commerce Ministry official, heads the Indian side. 

Earlier this year, U.S. tariffs on Indian goods were doubled to 50% after a 25% levy was imposed on August 27. These measures were part of Washington's strategy to increase pressure on Moscow amid its war in Ukraine. 

Export data shows India’s shipments to the U.S. dropped to U.S.D. 6.86 billion in August from U.S.D. 8.01 billion in July. Overall goods exports from India dropped to U.S.D. 35.10 billion in August, down from U.S.D. 37.24 billion in July. Meanwhile, the trade deficit with the U.S. narrowed to U.S.D. 26.49 billion. 

Issues Under Negotiation

• A major sticking point remains U.S. demands for greater access to India’s agricultural and dairy sectors. New Delhi has resisted these demands, citing “red lines,” and earlier scheduled rounds of negotiation were disrupted over such issues. 
• Earlier attempts at dialogue were delayed; a planned visit by the U.S. delegation in late August was cancelled due to major disagreements. Despite this, both sides remain publicly optimistic that they can reach a deal. Sergio Gor, U.S. nominee for Ambassador to India, has said the two countries are “not that far apart” on tariff issues. 
• Indian Commerce Minister Piyush Goyal has said that negotiations on the BTA are making “satisfactory” progress. He noted that Prime Minister Narendra Modi and U.S. President Donald Trump had earlier directed trade ministers to aim for completing the first phase of the agreement by Fall 2025 (November). 

Expectations & Outlook

Both diplomat-level and ministerial-level discussions have been held. The goal during today’s meeting is to find common ground on tariff lines and possibly agree on an interim trade understanding. But officials admit that “not much progress” has been made in recent rounds due mainly to sensitivities around market access and domestic protections in agriculture and dairy. 

There is a positive tone on both sides, though many believe the success of these talks will hinge on how willing each country is to compromise their demanding positions—especially the U.S. with its tariff demands and India with its agricultural and dairy safeguards. 

Conclusion

The resumption of India-U.S. trade talks in New Delhi marks a renewed push toward resolving tensions caused by recent U.S. tariff actions. With export declines and a narrowing trade deficit as a backdrop, both countries seem determined to salvage the bilateral trade agreement. The focus now is on overcoming domestic red lines and striking a balanced deal that allows for mutual benefit. Whether today’s negotiations bring a breakthrough or only incremental progress remains to be seen.