US and India Trade Agreement Progresses with Expected Tariff Reductions

Hints of a significant trade development between the United States and India have emerged, with President Donald Trump announcing progress towards finalising a new trade agreement. During a swearing-in ceremony for Sergio Gor, the new US Ambassador to India, held at the Oval Office, Trump stated that both nations are moving closer to an agreement that would include reductions in tariffs on Indian goods.

"We are making a deal with India, much different than before. Right now they don’t love me, but they will love us again. We’re getting a fair deal," Trump remarked, highlighting the ongoing negotiations. He acknowledged India's negotiating skills, suggesting that Gor would need to navigate these discussions carefully. The President also indicated optimism about the deal benefiting all parties involved.

Later, when addressing questions from the press, Trump confirmed that the current high tariffs on Indian imports are connected to India's previous dealings with Russian oil, which have reportedly decreased significantly. He expressed confidence that tariffs would be lowered in due course, stating, "At some point, we’re going to be bringing them down."

Trump further emphasised the importance of India, describing it as one of the world’s oldest civilisations with over 1.5 billion citizens, and noted the strong relationship between the United States and Indian Prime Minister Narendra Modi. He added, "Sergio has already enhanced that because he’s become friendly with the Prime Minister."

TRADE TALKS GAIN MOMENTUM

These remarks come amidst ongoing discussions between the two countries regarding the India-United States Bilateral Trade Agreement. Indian Commerce and Industry Minister Piyush Goyal reported on November 5 that negotiations are progressing well, although several sensitive issues remain unresolved. "Talks are going on very well. There are many sensitive issues, many serious issues, so naturally, it takes some time," Goyal stated, underscoring the complexities involved in reaching a consensus.

The agreement, which was initially proposed in February 2025 under directives from both governments, aims to significantly increase trade volumes from the current USD 191 billion to USD 500 billion by 2030. Since March, five rounds of talks have taken place, including a virtual meeting held on October 23, as negotiators strive to secure a first-phase deal by the end of 2025.

In September, Goyal led a delegation of senior officials to Washington to further discussions, which included Chief Negotiator Rajesh Agrawal. Concurrently, a US team, led by Assistant Trade Representative for South and Central Asia, Brendan Lynch, engaged in what officials described as "positive and forward-looking" discussions with India's Department of Commerce in New Delhi. Both parties have committed to intensifying their efforts to achieve a comprehensive and mutually beneficial trade agreement.