India-US Ties: Government Will Be Cautious on Trade Talks, Says Official
New Delhi is approaching trade negotiations with the United States with caution, according to a senior government official. While both nations aim for an early and mutually beneficial trade agreement, India is expected to carefully consider its interests and priorities.
The official's statement comes amidst ongoing discussions at various levels between the two countries. Commerce and Industry Minister Piyush Goyal recently visited the US for trade talks, accompanied by senior officials, including India's chief negotiator Rajesh Agrawal. These discussions follow a recent meeting in New Delhi between negotiators from both countries, which were described as positive.
Despite these efforts, several factors suggest a cautious approach from the Indian side. The U.S. government is currently in a shutdown, which could potentially delay discussions. "You all know, the U.S. government is currently in shutdown mode. So, keeping that in mind, we'll have to see how, where, and when the discussions can take place," Goyal said.
Furthermore, existing trade tensions between the two countries add complexity to the negotiations. The previous administration imposed tariffs on Indian exports, followed by additional tariffs linked to India's oil purchases from Russia. While the U.S. has urged India to reduce Russian crude imports, New Delhi has emphasized that national interest remains paramount.
India's negotiating position also involves addressing these existing trade barriers. India is seeking the removal of the additional duties imposed on it for buying Russian oil and a reduction in reciprocal tariffs. These tariffs, which have been doubled to 50% on most exports from India, significantly impact Indian exports, particularly in labor-intensive sectors like textiles, gems, and jewelry.
Despite these challenges, both countries have expressed a commitment to strengthening economic ties. Total bilateral trade between India and the US reached a record $132.2 billion in FY25. The U.S. emerged as India's biggest trading partner in 2022-23, driven by increasing economic ties. The two countries aim to more than double bilateral trade to $500 billion by 2030.
To achieve this ambitious goal, India is also focusing on diversifying its export partners and deepening trade cooperation with other economies. This includes advancing trade talks with Oman, Qatar, Chile, and Peru, alongside ongoing negotiations for a Free Trade Agreement (FTA) with the European Union.
The current trade talks aim to build upon the existing strong foundation of India-US economic relations. The U.S. is the 3rd largest investor in India, with cumulative foreign direct investment (FDI) inflows of $70.65 billion from April 2000 to March 2025. In FY25, India had a trade surplus of $40.82 billion with the U.S.
Looking ahead, the Indian government will likely maintain a balanced approach, seeking to expand trade and investment ties with the U.S. while safeguarding its economic interests. The outcome of these negotiations will be crucial in shaping the future of the India-US economic partnership.
