India and the United States are set to resume trade negotiations on Tuesday, New Delhi confirmed, sparking cautious optimism for progress after weeks of tension. The development follows President Donald Trump’s decision to impose new tariffs on India over its purchase of Russian oil, a move that unsettled trade relations between the two nations.
The discussions will take place in New Delhi, with Brendan Lynch, the US trade representative for South Asia, leading the American delegation. On India’s side, chief negotiator Rajesh Agarwal will oversee the dialogue. Although officials have not shared details of the agenda, the talks are being held under the framework of bilateral trade negotiations.
Last month, Washington raised duties on Indian imports sharply, imposing a 25% punitive tariff from August 27, effectively doubling total duties to 50%. The measure was part of the White House’s wider strategy to increase pressure on Moscow amid the Ukraine conflict.
India’s export figures highlight the strain. Shipments to the United States slipped to $6.86 billion in August, down from $8.01 billion in July. Overall, India’s goods exports dropped to $35.10 billion in August, the lowest in nine months, compared to $37.24 billion the previous month. However, the trade deficit narrowed to $26.49 billion. Exporters warned that the true impact of Washington’s higher tariffs will be reflected in the coming months.
Meanwhile, India’s foreign relations are in focus. Prime Minister Narendra Modi recently traveled to China for the first time in seven years, attending a summit hosted by President Xi Jinping. He was also seen alongside Russian President Vladimir Putin, signaling New Delhi’s balancing act amid global geopolitical pressures.
Earlier negotiations planned for late August were canceled after disagreements emerged over India’s reluctance to open its agricultural and dairy markets. Despite these challenges, hopes for a resolution remain. Trump has recently softened his stance, expressing optimism that a deal can be finalized soon. Supporting this view, Sergio Gor, Trump’s nominee for ambassador to India, remarked that both sides are “not that far apart” and differences could be settled within weeks.
The upcoming meeting will test whether India and the US can bridge their trade gaps and move closer to an agreement that benefits both economies.
