India has reduced oil purchases from Russia “very substantially,” US President Donald Trump has claimed, adding that his country was “pretty close” to reaching a “fair trade deal” with India, that would be “much different from what we had.” Trump also said the US would be bringing the tariff on India down “at some point.”
This is the second statement from Trump about the immediate prospect of a trade deal with New Delhi in less than two weeks, but his first remark about reducing the tariff on Indian merchandise.
A government official here confirmed Trump’s comment that the deal would be much different from what the US has signed so far. “India’s negotiations (when compared to other countries) have been the most comprehensive and most compliant with the World Trade Organisation (WTO) norms. Every sensitive sector and every sensitive issue has been taken care of while negotiating,” he added.
When asked at what stage the negotiations stood, the official said that the Indian side was “waiting to hear from the US”. He also said that more rounds of negotiations may not be required for the deal.
Five rounds of talks have been completed so far for the first phase of the bilateral trade agreement (BTA). The last in-person meeting between officials of India and US took place in mid-October when commerce secretary Rajesh Agrawal visited Washington. After that both sides have engaged virtually.
Late last month, an official said here that the two countries were “very near” to concluding the proposed initial BTA, as both sides were “converging” on most of the issues. The official, however, added that a decision on whether and when to conclude the deal would have to come from “higher political leadership” on both sides.
Even as work on the initial part of BTA with New Delhi was believed to be on, Trump announced a reciprocal tariff of 25% on India along with different levels of such additional levies for most other countries on August 7. Subsequently, on August 27, the US imposed another 25% tariff on India as a penal measure for buying oil from Russia. These tariffs cover about 60% of India’;s exports to the US, and have already hit shipments from some labour-intensive sectors like textiles & garments and gems & jewellery pretty hard.
“We’re making a deal with India, a much different deal than we had in the past. So right now, they don’t love me, but they’ll love us again,” Trump said on Monday. He was speaking at a ceremony in the Oval Office where Sergio Gor was sworn in as the US Ambassador to India by Vice President J D Vance. “We’re getting a fair deal, just a fair trade deal. We had pretty unfair trade deals. They’re very good negotiators, Sergio, so you have to take a look at that, if you would please,” Trump said.
Treasury Secretary Scott Bessent was also present. “But we’re getting close. Scott, I think we’re pretty close to doing a deal that’s good for everybody,” Trump said. Bessent responded to Trump in the affirmative, saying, “that’s right.”
The deal with the US is crucial as it is India’s biggest market. September was the first month through which the 50% extra tariffs by the US were in force. This led to a 12% decline in merchandise exports to the US to $ 5.5 billion. According to commerce ministry data, exports of gems & jewellery to the US have taken the hardest hit, contracting over 70% on year in September. Exports of cotton fabrics and garments declining 36%, marine products 26% and readymade garments 25%
Exporters have been waiting for tariffs in the US to normalise and are consistently providing inputs to the government. When the announcement of BTA was made in February during Prime Minister Narendra Modi’s visit to Washington, the target was set to complete the negotiations for the first tranche of the deal by fall. The signing of the BTA was said to increase bilateral trade from $ 191 billion to $ 500 billion by 2030.
(With PTI inputs)