The sixth round of talks on the bilateral trade agreement (BTA), originally scheduled to begin on August 25 in New Delhi, was postponed as U.S. negotiators pulled out amid escalating rhetoric from the Trump administration. The BTA aims to more than double bilateral trade to $500 billion by 2030, up from the current $191 billion.
The development comes after after White House imposed a whopping 50% tariffs on India effective August 27. Of this, 25% is a penalty on India for buying Russian oil. Washington has sought reduced tariffs on products such as corn, soybean, apples, almonds and ethanol, as well as increased access for US dairy products. However, India has opposed these demands as it would hurt the livelihood of small and marginal farmers.
Amid the disputes, India’s exports to the U.S. fell to $6.86 billion from $8.01 billion in July.
Last week, Trump had escalated tensions with a post saying, “Looks like we’ve lost India and Russia to the deepest, darkest, China,” after Prime Minister Narendra Modi appeared with Xi Jinping and Vladimir Putin at the Shanghai Cooperation Organisation summit in Tianjin. He has also urged European Union officials to consider tariffs of up to 100% on Chinese imports and extend similar measures to India.
The mood has since shifted, with Trump signaling a thaw. “I am pleased to announce that India and the United States are continuing negotiations to address the trade barriers between our two nations. I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our great countries!” he posted.Prime Minister Modi responded on X, “India and the US are close friends and natural partners.” He added that he was confident the talks would unlock the “limitless potential” of the partnership.
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