Despite progress in India-US trade talks, differences persist over final agreement
Washington DC: Significant progress has been made in trade talks between India and the US following a two-day meeting held in New Delhi on June 23–24 between US Trade Representative Jamieson Greer and Union Commerce Minister Piyush Goyal. However, experts note that despite this, several key differences remain regarding the conclusion of a final trade agreement.
Commenting on the talks, Wendy Cutler, Senior Vice President at the Asia Society Policy Institute (ASPI), stated that while positive progress was indeed made in recent meetings, reaching a comprehensive trade agreement with India remains challenging. According to her, the priorities and “red lines”—or critical conditions—of the two nations differ, creating obstacles to reaching a final conclusion.
Cutler also noted that developments over the past year have led to a lack of trust in the US within Delhi, making it even harder to finalize the negotiations. She clarified that this trust deficit is affecting the pace of the agreement between the two sides.
She further added that India seeks greater clarity on the tariff regime before finalizing any trade agreement. India’s priority is to secure a better and preferential tariff position compared to its competitors, thereby giving its exports an edge in the international market.
According to Wendy Cutler, India wants clear information regarding tariff rates and which products might be excluded from this arrangement. India is not in favor of rushing to finalize the agreement until there is clarity on this issue.
Additionally, India seeks assurances from Washington that there will be no further hikes in tariff rates in the future. However, experts believe that accepting this demand would not be easy for US policymakers, particularly the Trump team.
During the meetings, both sides discussed issues such as reducing trade barriers, enhancing market access, and strengthening bilateral trade. However, differences persist regarding issues such as tariffs, import restrictions, and the list of strategic products in sensitive sectors.
Experts note that while trade ties between India and the US are steadily strengthening, reaching a comprehensive Free Trade Agreement (FTA) or a full-fledged trade deal may take time due to structural differences and policy disagreements.
India is mindful of the rapidly shifting global supply chains and trade dynamics, and thus seeks to safeguard its interests in any potential agreement. Meanwhile, the US is making decisions based on its domestic industrial policy and strategic interests.
Negotiations between the two nations are expected to continue, with further technical-level meetings likely in the coming months. However, experts believe that a final agreement remains a distant prospect until a clear consensus is reached on issues concerning tariffs and mutual trust.
For now, the dialogue is seen as moving in a positive direction, yet a major trade agreement does not appear imminent without the resolution of complex issues.
