India-US trade talks in Delhi amid tariff tensions

The sixth round of India-United States trade talks is poised to commence on Tuesday, 16 September 2025, in New Delhi, marking a potential thaw in bilateral relations strained by recent tariff impositions. US Trade Representative for South and Central Asia, Brendan Lynch, is scheduled to arrive in the Indian capital on Monday evening, where he will engage with his counterpart, Rajesh Agrawal, special secretary in India's commerce ministry. 

The discussions, described by officials as a "fast-track" effort, come against the backdrop of escalating rhetoric from Washington over India's continued purchases of discounted Russian oil and perceived high tariffs on American goods.

With bilateral trade reaching $190 billion in the fiscal year 2024-25, these talks represent a critical juncture for both economies seeking to expand market access while navigating geopolitical pressures.

Arrival of US negotiator signals thaw in relations

Brendan Lynch's visit follows a recent icebreaker between US President Donald Trump and Indian Prime Minister Narendra Modi, which has injected optimism into the negotiations. Sources close to the talks indicate that the one-day session on Tuesday will focus on laying the groundwork for a broader Bilateral Trade Agreement (BTA), with an ambitious target to finalise the first phase by October or November. 

This resumption comes after a postponement earlier in the year, attributed to heightened US concerns over India's trade practices, including its refusal to grant greater access to sensitive agricultural and dairy sectors.

On social media platform X, reactions have been mixed, with users highlighting the strategic importance of the talks. One post noted the US delegation's arrival as a "positive outlook" despite Trump's recent tariff hikes to 50% on select Indian goods, while another speculated on pressure tactics from US lawmakers proposing even steeper duties on India and China.

Indian commentators have expressed cautious hope, viewing the engagement as a counterbalance to broader US protectionism under the Trump administration.

Background to the tariff dispute

Tensions escalated in late August 2025 when the US imposed an additional 25% tariff on Indian goods, bringing the total punitive levy to 50% on items such as textiles, pharmaceuticals, and auto components. This move was explicitly linked to India's persistent imports of Russian crude oil, which have surged since the Ukraine conflict, allowing New Delhi to secure discounted supplies and mitigate global energy price volatility. 

The tariffs, effective from 27 August, have already impacted Indian exports, with figures dipping to $6.86 billion in August from $8 billion the previous month.

The dispute echoes earlier frictions, including US grievances over India's 100% tariffs on certain agricultural products like corn and dairy items. A recent NDTV analysis drew parallels to previous US actions, such as tariffs on Russian oil, now extending to American corn as leverage against India's protective policies.

Trump's advisor, Peter Navarro, has been vocal, accusing India of maintaining "the highest tariffs in the world" and raising the Russian oil issue ahead of the talks, while claiming that "India is coming to the table." These statements, echoed in Indian media, underscore the blend of economic and geopolitical dimensions at play.

Key issues on agenda

At the forefront of discussions will be market access for US agricultural products, particularly corn, soybeans, and premium cheeses, without encroaching on India's vast domestic dairy sector, which supports millions of small farmers.

The US has signalled a softer stance, expressing interest in exporting niche items like artisanal cheeses—valued at $10.85 million in Indian imports for FY25—rather than competing in mass-market milk and yoghurt.

India, in turn, seeks reductions in US tariffs on its IT services, pharmaceuticals, and gems and jewellery exports, which constitute a significant portion of the $77 billion surplus New Delhi enjoys in bilateral trade.

Other sticking points include intellectual property rights, digital trade rules, and non-tariff barriers. The talks are also expected to address India's ongoing free trade agreement (FTA) negotiations with 10 countries, including the EU and UK, which could influence US strategies.

Poultry and livestock sectors have been highlighted in recent reports, with the US pushing for eased restrictions following its own tariff disputes. Broader geopolitical factors, such as India's deepening ties with Russia—aiming for $100 billion in bilateral trade by 2030—add layers of complexity, potentially complicating US efforts to isolate Moscow.

Statements from US officials

White House statements have struck a conciliatory tone post the Trump-Modi conversation, with officials emphasising a desire for a "reset" in ties. Lynch, in preparatory remarks, described the upcoming round as an opportunity to "explore a framework for the BTA," focusing on mutual benefits rather than confrontation.

However, Navarro's barbs—labelling India's tariffs as punitive and linking them to Russian oil—have kept the pressure on, as reported in The Times of India and India Today. On X, US-based analysts have speculated that these talks could extend to technology transfers and defence co-production, aligning with the Quad framework.

India's perspective, preparations

From New Delhi's viewpoint, the negotiations are an avenue to safeguard its $190 billion trade relationship while protecting domestic industries. Commerce Minister Piyush Goyal has reiterated India's commitment to "reciprocal" trade, but with safeguards for agriculture, a sector employing over 40% of the workforce. Preparations include policy drafts for incentives in data centres and AI, potentially opening doors for US tech firms. Indian exporters, hit by the tariffs, are lobbying for swift resolutions, with industry bodies like FICCI urging a focus on services trade liberalisation.

Social media buzz in India reflects a blend of pragmatism and nationalism, with posts decrying US "bullying" while acknowledging the need for diversification beyond Russian energy. One X user quipped that the talks could "help Indian farmers, IT, and pharma" if tariffs ease, potentially stabilising stock markets.

Possible outcomes, broader implications

Optimists predict incremental progress, such as tariff rollbacks on select goods and a roadmap for the BTA, which could boost Indian exports by $20-30 billion annually. Failure to bridge gaps, however, risks further escalation, with US lawmakers floating 500% tariffs as a negotiating ploy. Beyond economics, the talks intersect with global supply chains, where India positions itself as a counterweight to China amid US decoupling efforts.

In the long term, a successful deal could enhance strategic ties, including in semiconductors and green energy. As Lynch touches down, the world watches whether Delhi's negotiations yield a reset or merely more rhetoric in this high-stakes tango of trade and tariffs.