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‘India engaged in further trade talks with US’

03-08-2025

Bureau Report

NEW DELHI: India is engaged in trade talks with the United States, an Indian government source with knowledge of the discussions said on Friday, a day after US President Donald Trump signed an order imposing a 25% tariff on New Delhi’s exports.

Trump set steep import duties on dozens of trading partners, including a 35% tariff on many goods from Canada, 50% for Brazil, 20% for Taiwan and 39% for Switzerland, according to a presidential executive order.

A US delegation is expected to visit New Delhi later this month, the government source said.

“We remain focused on the substantive agenda that our two countries have committed to and are confident that the relationship will continue to move forward,” India’s foreign ministry said in a statement on Friday.

Trade talks between Washington and New Delhi have been bogged down by issues including access to India’s highly protected agriculture and dairy sector.

Nearly $40 billion worth of exports from the South Asian nation, the world’s fifth largest economy could be impacted by Trump’s tariff salvo, according to the source.

Without a deal, the rate singles out India for harsher trade conditions than its major peers, potentially damaging the economy of a strategic US partner in Asia that is seen as a counterbalance to Chinese influence.

The source said there is no question of compromising on India’s agriculture and dairy sectors, especially not allowing import of dairy products due to religiously based opposition to animal feed in these products.

On Wednesday, Trump also threatened additional penalties on India for its commercial dealings with Russia and membership in the BRICS group of major emerging and developing economies. There is no clarity yet on the penalty. Trump accuses BRICS of pursuing “anti-American policies”.

Differences between the US and India cannot be resolved overnight to arrive at a trade deal, a senior US official said on Thursday.

The US has a trade deficit of $46 billion with India.

Yesterday, US official told reporters differences between the US and India cannot be resolved overnight to arrive at a trade deal, citing geopolitical disagreements.

WHY IT’S IMPORTANT

President Donald Trump said on Wednesday Washington was still negotiating with India on trade after announcing earlier that day the US would impose a 25% tariff on goods imported from the country starting on Friday.

The 25% figure would single out India more severely than other major trading partners and threaten to unravel months of talks between the two countries, undermining a strategic partner of Washington’s and a counterbalance to China.

KEY QUOTES

“Our challenges with India, they’ve always been a pretty closed market… there are a host of other kind of geopolitical issues,” the US official said. “You’ve seen the president express concern about, you know, membership in BRICS, purchases of Russian oil and that kind of thing.”

While saying there were constructive discussions with India, the official added: “These are complex relationships and complex issues, and so I don’t think things can be resolved overnight with India.”

India has faced pressure from the West, including the US, to distance itself from Moscow after Russia invaded Ukraine in early 2022. New Delhi resisted that pressure, citing its longstanding ties with Russia and its economic needs, opens new tab.

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