Blitz Bureau
NEW DELHI: Signaling a thaw in recently frayed ties, India and the United States have agreed to step up efforts for an early conclusion of a “mutually beneficial” trade agreement. This follows a marathon seven-hour meeting between top negotiators of the two countries in New Delhi. The breakthrough comes just weeks after Washington’s punitive tariffs on Indian exports and energy imports had threatened to derail one of the world’s most vital economic partnerships.
The discussions were led by Brendan Lynch, Assistant US Trade Representative (USTR) for South and Central Asia, and Rajesh Agrawal, Special Secretary in Commerce Department. Both sides described the meeting as positive and forward-looking, with the Ministry of Commerce and Industry noting that the talks reaffirmed the “enduring importance of bilateral trade” and the need to intensify efforts toward a deal.
This was Lynch’s third visit to India and the first official dialogue between the trade teams since the US last month imposed a 50 per cent duty on a wide range of Indian exports, along with a 25 per cent levy aimed at discouraging New Delhi’s imports of discounted Russian oil. Against this backdrop, the meeting carried more significance than a routine technical exchange — it marked the first concrete step toward rebuilding confidence.
The meeting effectively revived negotiations that had stalled in August, when the planned sixth round of discussions was called off amid rising tensions. Officials refrained from announcing a new date for the rescheduled round, instead characterising the engagement as a stock-taking exercise following a six-week gap.
Indo-US trade deal back on fast track as talks resume
A US Embassy spokesperson said, “Assistant US Trade Representative Brendan Lynch had a positive meeting in Delhi with his counterpart, Ministry of Commerce and Industry Special Secretary Rajesh Agrawal, on September 16 to discuss next steps in bilateral trade negotiations.”
The conciliatory tone reflected broader political signals of de-escalation. Last week, both President Donald Trump and Prime Minister Narendra Modi posted upbeat messages on social media, stressing their commitment to resolving outstanding issues and finalising a trade deal at the earliest.
India and the US have been negotiating a limited trade package — the first phase of a Bilateral Trade Agreement (BTA). Modi and Trump had announced in February their intention to conclude the deal before the end of 2025. Commerce and Industry Minister Piyush Goyal has in recent days indicated that the pact could be finalised by November-end if key differences are bridged.
Yet significant hurdles remain. Ajay Srivastava, former trade ministry official and founder of the Global Trade Research Initiative (GTRI), said, “The US appears desperate to close a deal with India, even as its officials routinely use disparaging language against New Delhi in public forums. By naming India in its Supreme Court filing, Washington has made any deal politically harder.”
Srivastava noted that Washington’s insistence on curbing India’s Russian oil imports remains a flashpoint. “A deal will only be possible if India stops buying Russian oil, even though China and the EU continue doing so. But New Delhi must not compromise its core red lines. Agriculture and dairy are not just trade issues for India; they are livelihood concerns for over 700 million farmers,” he added.
The outcome of these negotiations will serve as a key test for the broader India-US relationship. A successful trade deal would unlock opportunities for Indian exporters in the world’s largest market while giving American businesses greater access to India’s 1.4 billion-strong consumer base.
Beyond trade, the deal could bolster cooperation in defense manufacturing, technology, supply-chain diversification, and clean energy — areas where both nations seek to reduce dependence on China. A breakthrough might even rekindle interest in a more ambitious Free Trade Agreement (FTA), dormant for years.
Conversely, if talks stall again, the fallout could spill into other strategic arenas, complicating coordination in platforms such as the Quad and slowing momentum in joint efforts on regional security and emerging technologies.
For now, both governments appear determined to avoid that outcome. With Modi and Trump personally invested in sealing the pact, the coming weeks are expected to see accelerated backroom diplomacy to clear remaining hurdles. The next two months, trade watchers say, will determine whether the world’s two largest democracies can turn goodwill into a concrete economic partnership.