Govt hopeful of resuming trade talks with US

India is optimistic about resuming negotiations with the US for the proposed bilateral trade agreement, an official said on Thursday, asserting that resolution of 50 per cent tariffs on Indian goods is pivotal to striking a deal. The US imposed a 25 per cent reciprocal tariff on Indian goods from August 7, followed by an additional 25 per cent tariff on August 27 as the penalty for India’s imports of Russian crude oil.

“Both tariffs need to be addressed to strike a deal,” the official said. “We hope to return to the table soon.” However, the dates for the sixth round of negotiations have not been finalised yet, the official said.

The tariffs imposed by the Trump administration halted the trade negotiations between the two countries. India and the US announced the bilateral trade agreement in February during Prime Minister Narendra Modi's visit to the US with the aim of boosting bilateral trade from $191 billion to $500 billion by 2030. The negotiations started in March, with five rounds completed. However, the US push for greater market access in India’s sensitive agricultural and dairy sectors has created friction, as these sectors are critical to the livelihood of small and marginal farmers. On August 15, the PM had reiterated India’s firm stance on protecting its farmers and fishermen.

Officials asserted that the talks were only postponed while ruling out the possibility of immediate retaliatory tariffs on the US. “Retaliation and negotiations cannot go hand in hand,” he said.

Despite the strain, engagement continues. On August 26, senior officials from both nations held virtual talks under the ‘2 2 inter-sessional dialogue’, discussing trade, investment, critical minerals and energy security. “We are talking to each other,” the official said, emphasising the complementary nature of the Indian and US economies and the need for a mutually beneficial deal.

The tariffs are projected to impact $48.2 billion worth of Indian exports to the US, potentially shaving 0.4–0.8 per cent off India’s GDP growth in FY26, according to estimates from economists and think tanks like the Global Trade Research Initiative.

Earlier, External Affairs Minister S Jaishankar had also underlined that the negotiations are not off.

“Negotiations are still going on. Nobody said the negotiations are off," he said on August 24.