A planned visit by a United States trade team to India for negotiations has been called off and is likely to be rescheduled, according to sources. The team was scheduled to be in New Delhi from August 25 to August 29 for the sixth round of discussions on the Bilateral Trade Agreement (BTA).

The cancellation comes amid rising trade frictions between the two nations, exacerbated by increased tariffs imposed by the U.S. and India's continued purchase of Russian oil. Sources indicate the postponement signals a delay in potential tariff relief and casts uncertainty on finalizing the first phase of the BTA by the fall.

The U.S. delegation was to be led by Assistant Trade Representative Brendan Lynch. The round of negotiations was considered crucial for aligning both countries on sensitive issues. The U.S. has been seeking greater access to India's agricultural and dairy sectors, a move that New Delhi has resisted, citing concerns for the livelihoods of small and marginal farmers.

Prime Minister Narendra Modi, during his Independence Day address, reiterated India's stance of not entering into any agreement that could harm the interests of farmers. This firm position reflects the challenges in reaching a consensus on key trade issues.

U.S. President Donald Trump recently commented on India's oil imports from Russia, suggesting potential secondary sanctions or tariffs. He stated that while India was doing about 40% of the oil business with Russia, China was also significantly involved. Trump warned of "devastating" consequences if secondary sanctions were imposed, but also indicated he might not have to use them.

The U.S. had already implemented a 25% tariff on Indian goods entering the U.S. on August 7, which it described as a "reciprocal tariff" to address the trade imbalance. An additional 25% tariff, as a penalty for India's continued purchase of crude oil and military equipment from Russia, is scheduled to take effect on August 27. The Indian government has called this punitive tariff "unfair and unreasonable".

Despite these trade tensions, India's exports to the U.S. saw a 21.64% increase during April-July, reaching $33.53 billion, while imports rose by 12.33% to $17.41 billion. The U.S. was India's largest trading partner in the April-July period of 2025-26, with a bilateral trade of $12.56 billion.

Both the U.S. and India have expressed the aim of more than doubling their bilateral trade to $500 billion by 2030, from the current $191 billion. However, the postponement of the trade team's visit and the ongoing disagreements over tariffs and market access indicate significant hurdles remain.