India team to visit US this week to finalize trade pact amid Russia oil row
The approaching 2025 deadline for the India-US trade agreement has prompted intensified negotiations. A high-level Indian delegation will visit Washington this week to bridge differences for a mutually beneficial pact. India's oil imports from Russia will be a key point to navigate.
New Delhi: With the 2025 fall deadline for the India-US bilateral trade agreement (BTA) approaching, the two sides have intensified activity to bridge differences on a bunch of issues. Commerce secretary Rajesh Agarwal is likely to lead a high-level delegation to Washington this week, just ahead of Diwali, to work through the gaps in the proposed pact, a senior government official said.
New Delhi's purchase of oil from Russia has been a key sticking point for the US. The official was, however, non-committal on whether the Russian oil issue would be taken up at the upcoming meeting. The issue is not being handled by the commerce ministry, the official said.
In the visit to Washington DC, Agarwal, who took charge on 1 October after serving as India’s chief trade negotiator, will be joined by Darpan Jain, joint secretary in the commerce ministry and B.M. Mishra, director in the same department, among others.
The US has set a strong condition for India to halt its oil purchases from Russia, alleging the move supports Moscow's war against Ukraine. Washington also seeks to sell more energy to India under the proposed trade deal.
In a punishing move, the Donald Trump administration imposed an additional 25% tariff on Indian exports from 27 August as a penalty for the country's Russian oil purchases, raising the total tariff to 50%, the highest among all its trading partners, barring Brazil.
A second person familiar with the development said New Delhi is seeking to buy more natural gas from the US as part of the ongoing trade talks.
In a submission before the US's Supreme Court, the Trump administration has cited India’s case to justify the imposition of tariffs as a means to penalize countries that continue trading with nations accused of fueling war.
A section of trade experts expects India to taper its Russian oil buys. Ajay Srivastava, co-founder of the Global Trade Research Initiative (GTRI) said, "India may eventually have to halt its imports of Russian oil unless the US court decides to strike down the current levy."
The purchases are not that attractive any more too. "The earlier price discounts offered on Russian crude to India are no longer available, and with the narrowing price advantage, India’s purchases of Russian oil may soon taper off," Srivastava said.
At the upcoming meeting in Washington, the two sides will look to flesh out what officials describe as a “mutually beneficial" deal, said the two people familiar with the matter who have been cited above.
The deal is about balancing the interests of both sides, with each trying to push its own priorities, said the senior official cited above, without divulging any other critical issues apart from the red lines drawn by India on opening market access for American farm and dairy products. “The talks have progressed positively in recent weeks, with both governments showing readiness to bridge differences and finalize the agreement. There is strong political will on both sides to close the negotiations soon. The discussions have been moving in a constructive direction," the official added.
The upcoming visit follows a meeting between the US ambassador Sergio Gor and commerce secretary Rajesh Agarwal in New Delhi on Sunday, where the two reviewed bilateral economic ties and India’s investment commitments in the US amid Washington’s push to expand domestic manufacturing under the Make in America initiative.
A day earlier, Gor held separate meetings with prime minister Narendra Modi, external affairs minister S. Jaishankar, national security adviser Ajit Doval and foreign secretary Vikram Misri. Gor has not yet met commerce minister Piyush Goyal.
According to the second person cited above, the points of contention relate to tariff adjustments on certain industrial goods, agricultural access, and the treatment of digital trade and data flow provisions.
Queries sent to the commerce ministry remained unanswered till press time.
The Indian delegation’s visit to Washington is expected to focus on paving the way for an agreement before the end of November, the fall 2025 deadline highlighted in the joint statement issued by the two countries on 13 February, when Prime Minister Narendra Modi had visited Washington.
The two sides have held five rounds of face-to-face talks so far. It is not yet clear whether this will be treated as the resumption of the sixth round of talks, which was put on hold after the US negotiating team cancelled its visit scheduled for 25 August. Talks on the India-US BTA resumed on 16 September, after a month-long pause over India’s red lines on agriculture, dairy, and genetically-modified crops.
As reported by Mint on 13 October, US trade negotiators also want India to allow online marketplaces—such as Amazon India and Walmart-owned Flipkart—to stock and sell their own goods, seeking a policy change that could reshape India's online retailing.
India’s exports to the US rose 18% to $40.35 billion during April-August, while imports grew 8.5% to $21.61 billion. This took the total bilateral trade to $61.96 billion during the five-month period, up 14.5% from $54.12 billion a year ago.
“India must approach these negotiations with caution and clarity," said Srivastava. “With China, the US has shown that trade deals can be rewritten overnight. The so-called ‘Phase One’ deal was followed by fresh 100% tariffs within months. India should learn from that experience and insist on genuine reciprocity and long-term predictability."
He, however added that strengthening domestic capacity in technology, minerals and manufacturing will give India "the resilience and leverage to manage any future trade shocks".
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