The United States and India are nearing a major trade agreement that could redefine their economic relationship, despite ongoing disputes over Russian oil and tariff negotiations.
The United States and India are nearing a trade agreement that officials say could mark a significant shift in bilateral economic ties, even as a few unresolved issues continue to slow the finish. A US State Department official said the two sides were “90 per cent there” and suggested a deal could emerge soon, adding that it would “unleash another level” of relations that have long fallen short in the trade arena.
The comments follow a February framework announced by Washington and New Delhi for an interim accord on reciprocal and mutually beneficial trade. The White House said at the time that the arrangement was intended to reduce or eliminate tariffs on US industrial goods and a broad range of American food and agricultural products, while also opening India’s market further to US exports. Separate White House material described the pact as a historic trade deal and said it included lowering a US reciprocal tariff on Indian goods from 25% to 18%, alongside the removal of a 25% tariff on imports from India.
India’s commerce minister, Piyush Goyal, said earlier this week that the agreement was “almost done and dusted”, but noted that negotiators were still trying to secure a competitive edge for Indian exporters over rival countries. That effort comes as both sides also face pressure from wider geopolitical and commercial tensions, particularly over India’s purchases of Russian crude oil.
Those tensions have intensified after the US Congress passed, and President Donald Trump signed, legislation in September giving Washington authority to impose tariffs of up to 100% on countries identified as major buyers of Russian oil and gas. KPMG said the law could affect India, one of the largest purchasers of Russian crude, while the Global Trade Research Initiative’s Ajay Srivastava argued that Washington was using the threat of heavy oil tariffs to push India towards cutting Russian imports and accepting a more unequal bilateral trade pact. The coming weeks will determine whether the trade breakthrough can be completed without becoming entangled in that wider dispute.
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