New Delhi, September 16: The possibility of a US trade deal breakthrough with India faces a major hurdle. Washington has imposed a 25% extra tariff on Indian goods linked to Russia’s oil sales. Experts at the Global Trade Research Initiative (GTRI) warn that talks cannot move forward unless this tariff is removed.
The two countries have restarted discussions after a pause. This round is significant because it is the first official meeting since the tariff hike on August 27, 2023. Former President Trump announced the increase, raising tariffs on Indian products to 50%. He argued that India’s oil purchases from Russia justified such action.
GTRI notes that progress will stay slow unless the US shows flexibility. India should prepare for long negotiations instead of quick fixes. Washington may want a deal, but its officials continue to use tough language against India in public forums.
Agriculture and dairy remain especially sensitive. These sectors employ more than half of India’s workforce. Millions of farmers depend on them for survival. GTRI insists that India must hold firm, treating these as issues of livelihood rather than just trade concessions.
Another challenge is how much India can concede without weakening its right to set economic rules. Until the US withdraws the 25% tariff, GTRI believes meaningful progress will not happen. They suggest India formally register its concerns, perhaps through an amicus curiae brief supporting US businesses contesting the tariffs.
Talks for a Bilateral Trade Agreement (BTA) began in March 2023. Both nations hope to conclude the first stage by October-November 2025. But the tariff increases have slowed momentum. Trump’s second-term policy of matching tariffs with trading partners, including India, has only widened the gap.
The US seeks to fix trade deficits through higher duties. India, however, stays cautious about opening its markets too widely. Moving forward will require balancing national priorities with economic opportunities.
In conclusion, the outcome depends heavily on tariff relief. Without it, a US trade deal breakthrough looks uncertain, leaving both nations to balance trade interests with livelihoods.
