India and the US resumed bilateral trade deal talks on Tuesday with Donald Trump administration’s Brendan Lynch, the assistant US Trade Representative for South and Central Asia, heading the delegation.
Lead negotiators from India and the United States have begun discussions regarding the planned trade deal to resolve challenges arising from high tariff rates that have led to unclear situations for export businesses, according to an official's statement on Tuesday.
"The trade talks have started," the official told PTI.
This is the first face-to-face trade discussion since US President Donald Trump levied punitive tariffs on New Delhi regarding Russian oil purchases effective August 27.
The American trade delegation's planned visit to India during August 25-29 for the sixth round of BTA discussions was postponed after the US levied hefty 50% tariffs on India, including a 25% punitive charge for Russian oil purchases.
Subsequently, both nations have maintained weekly virtual consultations. The talks come at a time when Trump has struck a conciliatory note on India-US ties, a move reciprocated by PM Narendra Modi.
India-US trade deal talks: What’s on the table?
According to Rajesh Agrawal, special secretary, Department of Commerce, a contingent of US trade representatives will visit New Delhi on Tuesday.
"We will be holding talks to see what will be the future" of trade negotiations, Agrawal.
The meeting aims solely to establish a roadmap for addressing trade-related matters and does not constitute the subsequent round of discussions for the proposed bilateral trade agreement (BTA), according to an ET report.
The single-day meeting will serve as a preliminary discussion before the next formal negotiation round, which will be scheduled based on the meeting's results.
"This is not an official 'round' of negotiations but it will definitely be a discussion on the trade talks and on trying to see how we can reach an agreement between India and the US," Agrawal, who leads India's negotiating team in the US trade discussions, told reporters.
The bilateral discussions have taken place at multiple levels, including negotiating teams and ministerial discussions, with Tuesday's meeting representing a "continuation" of these engagements.
According to trade ministry statistics released on Monday, India's exports to the US decreased from $8.01 billion in July to $6.86 billion in August.
A senior government representative indicated that whilst virtual engagement continued between both parties, progress remained limited due to an unfavourable "environment". The US administration has been urging India to reduce its Russian oil imports, suggesting these purchases support Russia's military actions in Ukraine.
During his Senate appearance last week, US ambassador-designate to India Sergio Gor mentioned that Trump extended an invitation to the country's trade minister for discussions with US Trade Representative (USTR) Jamieson Greer in Washington.
Agrawal noted, "We have also noted that, as part of his Senate hearing, he mentioned that the Indian trade minister has been invited." He further clarified, "We will have discussions on it… Only trade-related issues will be discussed, non-trade issues will not be discussed."
Previously serving as the USTR's director for India and in the agency's Office of Agricultural Affairs, Lynch has been a key figure. Commerce Secretary Sunil Barthwal noted, "There have been discussions going on (between India and the US) on the diplomatic level and at the level of trade negotiators and ministers."
He further added, "On the trade front, a team of US trade negotiators will be coming to India for discussions. Further courses of action will also be discussed, but overall there is a positive frame of mind in both the countries with respect to trade issues."
India’s expected to stick to its red lines
The recent social media exchanges between PM Modi and Trump have garnered attention, particularly noting Modi's deliberate shift from personal rapport to formal diplomatic discourse, according to a TOI report.
Trump's posts on Truth Social platform have highlighted his 'good friend' Modi whilst discussing trade negotiations. However, PM Modi’s responses focused strictly on bilateral relations, with sources telling TOI that trade discussions would maintain a professional approach. India remains firm on its position regarding agricultural import duties, dairy products, and its autonomy in commodity procurement, particularly crude oil.
Whilst acknowledging the significance of US relations and the impact of 50% tariffs on certain industries, the Indian government maintains that trade agreements must benefit both nations. The administration emphasises protecting vulnerable sectors, particularly small-scale farmers. Sources confirm that matters concerning health standards, specifically regarding GM food, and cultural sensitivities about animal-based cattle feed remain non-negotiable.
Government officials indicate a careful approach towards negotiations with the Trump administration, considering its distinctive decision-making structure where presidential authority is paramount, whilst secretaries primarily serve to report on developments.
Despite recent encouraging signals from Trump, Indian officials maintain a cautious stance whilst adhering to their core positions, as his team continues to exert pressure on India.
Trump's adviser Peter Navarro criticised India on Monday, implying that New Delhi was looking for a deal.
"India is coming to the table. Prime Minister Modi sent out a very conciliatory, nice, constructive tweet and President Trump responded to that, we'll see that this is how this works. But as a practical matter, we know that on the trade side, they have the highest tariffs for any major country. They have very high non-tariff barriers. We had to deal with that like we are dealing with every other country that does that," he stated during a television interview.
However, the sequence of events shows that it was Trump who initiated positive discourse about his "good friend" Modi and India-US relations on September 6 and September 10, to which the PM subsequently responded on social media.