India-US Trade Talks Resume Amid Tensions Over Tariffs and Russian Oil;

New Delhi, September 16: A high-level US trade delegation, led by Assistant US Trade Representative for South and Central Asia, Brendan Lynch, arrived in New Delhi late Monday evening for a crucial round of discussions with Indian officials. The one-day visit marks the first in-person engagement between the two sides since trade negotiations hit a roadblock last month. The breakdown in talks came after the US imposed additional 25% tariffs on Indian goods, effective August 27, in response to India’s continued purchase of Russian oil. These new levies are on top of the earlier 25% reciprocal tariffs introduced on August 7, putting significant pressure on Indian exporters who now face reduced competitiveness in the US market. Despite ongoing virtual discussions, both sides had made limited progress, with Indian officials citing an “unfavorable environment” for negotiations. Now, with the US team on the ground, there is cautious optimism that face-to-face talks may help reset the tone of the relationship. A Shift in Momentum? Rajesh Agarwal, India’s chief negotiator and Special Secretary in the Ministry of Commerce, confirmed the arrival of the US team and the planned discussions. “This is not a formal round of negotiations, but we are hoping to explore how both sides can move forward,” he said. Commerce Secretary Sunil Barthwal echoed this sentiment, stating that talks have been ongoing at various diplomatic and ministerial levels. “There is a positive frame of mind in both countries regarding trade,” he noted, suggesting that the groundwork for resolution is being laid. However, the visit comes at a time when Indian exporters are already feeling the heat. The steep tariffs have led to order cancellations by US importers, pushing the Indian government to consider a relief package. Exporters, struggling with liquidity and market uncertainty, recently met with Finance Minister Nirmala Sitharaman and RBI Governor Sanjay Malhotra to seek support measures—including easier loan terms, currency adjustments, and market diversification support. One exporter, who attended the meetings, warned that a continued delay in resolving trade tensions could lead to a permanent loss of the US market. “Importers are looking at other suppliers. If we don’t act now, we may lose that business for good,” he said. Underlying Frictions: Russian Oil and GM Crops While both nations have publicly expressed willingness to strengthen trade ties, underlying issues remain complex. One key sticking point is India’s oil trade with Russia. The US, in a recent statement, called on G7 countries to increase pressure on nations continuing to buy Russian oil—a group that includes India and China. India, however, has stood firm, citing economic and commercial interests. Finance Minister Sitharaman emphasized that India’s energy needs take precedence and that the country would continue buying Russian oil to ensure energy security. Another point of contention is agriculture. The US has reportedly urged India to open its markets to genetically modified (GM) agricultural products, which face strong opposition from Indian farmers. Prime Minister Narendra Modi, in his Independence Day speech, made it clear that his government would prioritize the interests of Indian farmers, fisherfolk, and cattle keepers. “Modi is standing like a wall against any adverse policy that could impact Indian farmers,” he said, signaling little room for compromise in this area. Looking Ahead Despite the hurdles, there are signs of a possible thaw. US President Donald Trump recently remarked that he was “certain” trade talks with India would be successful, while Prime Minister Modi called the US a “natural partner,” highlighting shared goals for a “brighter, more prosperous future.” As the US delegation holds its discussions in New Delhi today, both sides are expected to assess the scope for reviving stalled negotiations and navigating the complex web of geopolitical and economic concerns. Whether this meeting will mark a turning point or remain another missed opportunity will become clearer in the coming days—but for now, all eyes are on the diplomatic tables in New Delhi.

NEWS