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Discussions resumed in September after Trump
struck a conciliatory tone and spoke to Modi, rais
ing hopes for a breakthrough.
Indian officials held “constructive” talks with
US counterparts in Washington last month, agree
ing to push for an early conclusion of a mutually
beneficial trade deal.
The two sides have held five rounds of negotia
tions, with the sixth, postponed in August, now
expected to conclude the first phase of the pact
next month, as agreed by Trump and Modi.
Officials to visit Washington
A team of senior Indian officials will visit the US
this month for negotiations on the proposed Bilat
eral Trade Agreement (BTA).
Leaders of both countries had directed officials
in February to finalise the first tranche of the pact
by the fall of 2025. “The Indian team will visit this
week,” an official said.
Sector focus and incentives
Last month, India’s commerce and industry min
ister Piyush Goyal led an official delegation to
New York for trade talks.
India is seeking greater participation from pri
vate players, including US firms, in its renewable
and nuclear energy sectors.
“Investments coming into our renewable ener
gy sectors are an important area of our relation
ship (with the US),” the official said, noting that
New Delhi was open to buying more Liquefied
Natural Gas (LNG) from the United States.
When asked about the Trump administration’s
call for greater Indian investment in the US, the
source said New Delhi was not opposed and
viewed overseas investments by Indian firms
positively, similar to China’s approach.
Export shock and losses
The US tariff hikes have hurt Indian exports of
textiles, leather goods, gems & jewellery, and food
products, prompting the government to diversify
markets and offer incentives to exporters.
India’s exports to the US fell to USD 6.86 billion
in August from USD 8.01 billion in July, with fur
ther declines in September.
The US remained India’s largest trading partner
for the fourth consecutive year in 2024-25, with
bilateral trade valued at USD 131.84 billion (USD
86.5 billion exports).
The US accounts for about 18 per cent of India’s
total goods exports, 6.22 per cent of imports, and
10.73 per cent of total merchandise trade.
Energy market context
Negotiations are proceeding against a backdrop of
global energy market shifts and US pressure on
Russia’s energy buyers.
Russia is India’s top oil supplier, exporting 1.62
million barrels per day to India in September,
about one-third of the country’s oil imports.
For months, Modi resisted US pressure, with
Indian officials defending the purchases as vital to
national energy security.
While imports from other producers would
likely cost India more, lower oil prices would tem
per the impact. Some Indian refiners are prepar
ing to cut Russian oil imports, Reuters reported,
with expectations of a gradual reduction.
They said it would be difficult to immediately
stop buying Russian oil, as a sudden switch to
other crude sources would drive up global oil
prices and risk inflation.
Trade-offs and data
Between April and September, India imported 1.75
million barrels per day of Russian crude, down to
about 36 per cent of total oil imports from 40 per
cent a year earlier.
US crude imports rose 6.8 per cent to about
213,000 bpd, making up 4.3 per cent of total im
ports. The share of Middle Eastern oil rose to 45
per cent from 42 per cent in the same period.
Government statement
India said discussions were ongoing with the
United States on deepening energy cooperation.
“It has been our consistent priority to safeguard
the interests of the Indian consumer in a volatile
energy scenario. Our import policies are guided
entirely by this objective,” the foreign ministry
said. The statement did not refer to Trump’s com
ment about India’s purchases of Russian oil.
Trump’s remarks and timing
Trump said Modi could not “immediately” halt
shipments, calling it “a little bit of a process, but
that process will be over soon.” A move by India to
stop imports would signal a major shift by one of
Moscow’s top energy customers and could reshape
decisions by other nations still importing Russian
crude. Trump wants to leverage bilateral relation
ships to enforce economic isolation on Russia,
rather than relying solely on multilateral sanctions.
Business engagement
Amid the diplomatic backdrop, business leaders
have engaged with policymakers.
JP Morgan CEO Jamie Dimon told the BBC he
wanted to “bring India closer” and believed a deal
was near to reduce additional tariffs on India,
imposed over its Russian oil trade. “In fact, I’ve
spoken to several of the Trump officials who say
they want to do that, and I’ve been told that they
are going to do that,” Dimon said.
What’s next?
The negotiations aim for a pact addressing tariffs,
digital trade, investment barriers and broader
economic cooperation.
US negotiators have said curbing Russian crude
purchases would be crucial to reducing India’s
tariff rate and sealing a deal.
As the Indian team prepares to visit Washington
this for the sixth round of talks, both governments
face decisions on energy, trade and investment that
could shape economic relations for years.
Officials describe the meetings as constructive
and say they are pushing for an early conclusion to
a deal they call mutually beneficial. (With inputs
from agencies)
Renewed push for balanced
pact as tariffs bite exporters
INDIAN TEAM TO VISIT WASHINGTON THIS WEEK FOR SIXTH ROUND OF TALKS
News
www.indiaweekly.biz • October, 2025
02
GLOBAL BALANCE: India and US resumed talks in September
after Donald Trump spoke to Narendra Modi, signalling renewed
engagement; (top left) Last month, India’s commerce and industry
minister Piyush Goyal led an official delegation to New York for
trade talks; and India commerce secretary Rajesh Agrawal
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