Trump says India, US are on negotiating table; expresses confidence in resolving trade barriers

In a significant development amid escalating trade frictions, President Donald Trump on Wednesday announced that the US and India are “continuing negotiations” to resolve longstanding trade barriers between the two nations and expressed strong hope towards finalising a bilateral trade pact, announced in February this year.

Also read: India, US natural partners; looking forward to speaking with Trump: PM Modi

“I am pleased to announce that India, and the United States of America, are continuing negotiations to address the Trade Barriers between our two Nations,” Trump wrote on Truth Social. “I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our Great Countries!”

The announcement marks a notable shift in tone from Trump’s earlier criticisms of India as a “totally one-sided disaster” in trade relations, particularly following the imposition of 50% tariffs on Indian exports in late August. The tariffs, including a 25% for trade imbalance effective from August 1 and an additional 25% penalty for India’s purchases of Russian oil, had strained bilateral ties and threatened nearly 50% of India’s $86.5 billion merchandise exports to the US. Not just Trump, but his Trade Adviser Peter Navarro and Commerce Secretary Howard Lutnick among others too criticised India for buying oil from Russia and for imposing “maharaja tariffs”.

Indian officials, though, have maintained a diplomatic stance, with Foreign Minister S Jaishankar noting in August that negotiations continue despite “redlines” on sensitive sectors like agriculture and dairy. Commerce and Industry Minister Piyush Goyal on September 2 asserted that India is in dialogue with the US for a Bilateral Trade Agreement and said India is open for a fair and mutually beneficial trade pact. 

The BTA was announced in February with an objective to double the bilateral trade to $500 billion by 2030. The sixth round of negotiations scheduled for August 25-29 was delayed following the US President’s 50 per cent tariff on Indian goods. Disagreements over market access, particularly in India’s agriculture and dairy sectors, and the US demands to halt Russian oil imports have delayed the progress.

The US tariffs are projected to hit exports particularly from labour intensive sector such as textile, machinery, leather, and MSMEs. Chief Economic Adviser V Anantha Nageswaran has warned that the 50 per cent tariffs could reduce the country’s GDP by 0.5% to 0.6% this fiscal year.

The Indian government had declared the tariffs “unjustified and unfair” and stated that it would take all necessary actions to protect its national interest.