US President Donald Trump on Tuesday declared that the United States will reduce tariffs on Indian goods, claiming that Washington and New Delhi are “pretty close” to finalising what he called a “fair trade deal.”
Yet, beneath the optimism, his remarks underscored continuing US pressure on India — particularly regarding Russian oil imports, an issue Trump has consistently used as leverage over New Delhi.
Trump said current tariffs on India — roughly 50%, the highest applied to any country — stem largely from penalty duties tied to India’s continued purchase of Russian crude.
“Right now, the tariffs are very high on India because of the Russian oil, and they have stopped doing the Russian oil… It’s being reduced very substantially,” he said at the White House. “We will bring the tariffs down at some point.”
His tone suggested that tariff relief still hinges on India aligning with US strategic interests — especially distancing itself from Moscow. The message was clear: economic concessions follow political compliance.
India Says Talks Already Complete
Indian officials in New Delhi, however, presented a different picture — one of confidence and preparedness, hinting that negotiations are essentially done.
According to senior officials, both sides have already finalized the legal text of a WTO-compliant comprehensive trade agreement, and no further formal discussions are required.
“We don’t see the need for any more rounds of negotiations,” an official said, noting that India is awaiting Washington’s approval. New Delhi insists that its sensitivities — from agriculture to dairy to domestic labour — remain safeguarded.
India was among the first countries to initiate trade talks earlier this year, following Prime Minister Narendra Modi’s US visit. Officials now hope months of back-and-forth will culminate in a deal soon.
Parallel Diplomacy With Other Partners
Even as India inches closer to the US agreement, New Delhi continues expanding trade ties elsewhere.
Talks with New Zealand are entering the final stretch, with Trade Minister Todd McClay due in India this week, and the EU’s Trade Commissioner will visit in December to advance negotiations.
India is positioning itself as a key global trade hub — not a nation seeking approval from Washington alone.
Goyal: “No Compromise on Farmers & Workers”
Commerce and Industry Minister Piyush Goyal reiterated that India will not sacrifice domestic interests for any agreement, stressing protection for farmers, dairy producers, and workers.
“We are working for a fair, equitable, and balanced trade deal,” Goyal said, emphasizing India’s search for new export markets — including Russia — for sectors like fisheries impacted by steep US duties.
He added that the deal with the US could materialize anytime — “tomorrow, next month, or next year.”
Geopolitical Calculus: India, China & Tariff Strategy
Since the recent easing of US-China tensions, Washington’s strategic gaze has shifted firmly toward India — its long-term hedge against Beijing.
Trade experts say India must secure tariff reductions of at least 15% to remain competitive globally, especially against nations like Vietnam, which is rapidly emerging as a manufacturing rival and could surpass India’s exports soon if tariff gaps persist.
The US currently keeps tariffs at approximately 20% on Vietnam and 19% on ASEAN nations, making India’s push for a 15-20% band critical for its “China-plus-one” positioning.
Energy Ties Remain Key
India may also increase energy imports from the US, hoping to leverage the shift to secure favourable tariff outcomes.
Goyal previously noted that US-India cooperation will remain a major pillar of India’s long-term energy security strategy — including nuclear collaboration and interest in American small modular reactor technology.
India and the US have begun drafting the final trade agreement text. New Delhi believes no further negotiations are needed.
With nearly one-quarter of the tariff burden tied to Russian oil purchases, India expects its final tariff structure to fall in the 15-20% range — assuming geopolitical pressure does not resurface as a bargaining tool.
Trump’s comments reveal optimism — but also his continued expectation that India must align with US strategic preferences before receiving full trade benefits. The balance between sovereignty and partnership remains the real negotiation.
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