India-US trade talks on track even as Trump-Putin meet adds to tariff uncertainty
Discussions are advancing on 'four parallel tracks' involving negotiators, ministers, diplomats, and industry representatives, commerce secretary Sunil Barthwal told reporters on Thursday. He said clarity on the proposed sixth round of talks would emerge later this month.
'When we met with the US team in New Delhi, they indicated another round of discussions in the last week of August. We are guided by the joint statement made by the leadership, which outlined the goal of doubling bilateral trade between the two nations to $500 billion,' he said.
'We are actively engaged. The US is a very important trade partner for India, and India is an important partner for the US. By the last week of August, we will have a clearer picture of how the discussions are progressing,' he added.
The US is not only India's largest trading partner, but also one of the few major economies with which New Delhi enjoys a significant trade surplus. India's goods trade surplus with the US rose to $41.18 billion in fiscal year 2025, up 16.6% from $35.33 billion a year earlier. The increase was driven by an 11.6% rise in exports to $86.51 billion, while imports from the US grew 7.4% to $45.33 billion.
In contrast, India's overall goods trade posted a deficit of $282.8 billion in FY25.
Barthwal said that negotiations toward a bilateral trade agreement were 'progressing steadily', with both sides aiming to conclude the process by fall 2025.
The assurances came a day after US Treasury Secretary Scott Bessent warned that Washington could escalate secondary tariffs on India if the forthcoming Trump-Putin talks fail to yield a breakthrough.
'We have put secondary tariffs on Indians for buying Russian oil. And I could see, if things don't go well, then sanctions or secondary tariffs could go up,' Bessent told Bloomberg TV.
The US has already announced two rounds of duties on Indian goods: a 25% tariff that took effect on 7 August, and another 25% penalty linked to Russian oil imports, due to begin from 27 August.
A senior Indian official, speaking on condition of anonymity, stressed that 'we would not like to speculate on the impact of the second set' of tariffs.
For the duties already in force, the government is engaging with industry stakeholders and closely tracking sectors most exposed to the US market. Export Promotion Councils, particularly those representing labour-intensive industries, have been in talks with the commerce ministry.
The official mentioned above said Indian exporters generally fall into two camps: those heavily reliant on the US and those with more diversified markets, including the UK and the European Union.
'The companies may face challenges, but they are exploring other avenues. If, over the next six months, UK markets open up and tariffs on labour-intensive sectors drop to zero, companies that lose in the US may gain in the UK,' the official said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
18 minutes ago
- Indian Express
India's rating upgrade comes at the right time
The upgrade of India's rating to BBB from BBB (-) by S&P is significant for two reasons. First: It was long overdue. On several forums, it has been argued that India deserves a higher rating given its consistent high level performance on all scores before and after the pandemic. Second: The timing is appropriate. It vindicates the view that India is one of the best performing large economies in the world. And this has been the story for the last three to four years. S&P has evidently reposed faith in India's performance over the years and believes that while the tariff saga needs to be watched closely, the overall story is more or less in place. The main areas of delight have been the following. First, India's growth has been stable and the path for the year is well placed. S&P is talking of growth being around 6.8 per cent for the next three years which could look conservative as it is likely to cross 7 per cent during this time period. It buttresses the view that growth will be around 6.5 per cent this year too which is a big test given the tariff trauma. It has been stated that the tariff issue will not be a barrier to growth this year given that growth is propelled by the domestic economy. Second, fiscal consolidation has been carried out quite aggressively. The fact that there was no large scale largesse during the pandemic has made it easier. More importantly, there has also been a lot of cleaning up which has been done through the delivery of subsidies. Further, the quality of expenditure has been improving with the focus on capex. The impact on infrastructure is visible. This has been done without straining fiscal balances. Third, inflation has largely been under control which is important as it guarantees stability. Fourth, monetary policy has been streamlined and has effectively navigated the growth-inflation tradeoff. Fifth, the external sector has been an epitome of resilience as seen in the strong balance of payments and the buildup of forex reserves. Interestingly, S&P does not see much threat on the issue on oil imports. While there would some strain in terms of cost, this is something that can be absorbed easily. The attractiveness of the Indian economy reflected in the FDI and FPI flows. Here decisions are based on hard research and the political and economic dynamics and future outlook are examined threadbare. India has historically been an attractive market among the emerging economies. The final pat came from the inclusion of Indian bonds in global indices such as JP Morgan, and Bloomberg. The upgrade should infuse more foreign flows as often fund houses have limits to trading in countries with differential ratings. So what does this upgrade means for us? To begin with, it comes after a relentless intellectual battle the government has waged with the rating agencies for quite some time now. While the one notch upgrade is not big as the outlook is still stable, there is scope for a change to positive before a further upgrade becomes due. Understandably, these ratings are sticky and decisions are taken after considerable deliberation and progress is tracked minutely before any change is made. Therefore, while an upgrade looks likely, it can take another two to three years. Second, this is something which will always make other rating firms like Moody's and Fitch reconsider their position on India. While each agency has its own distinct approach, there is a possibility that they would also have an upgrade on the rating table when the issue comes up. Third, this one notch upgrade will sound well in the market. The Indian government does not borrow in international markets and hence is not affected directly in terms of its debt programme. However, several Indian companies which borrow in the global financial markets can draw a marginal advantage in terms of cost of borrowing. This is so as normally the sovereign rating becomes the base rating for all entities. And finally, considering the noise and controversy over the tariff issue, this does send a positive signal on the strength of the economy. Going ahead, S&P does see scope for a further upgrade depending on how the fiscal consolidation process works out. One can be confident that this will continue as it has been shown in the last few years that the deficit as well as debt ratios have been the main focus of the government. A similar approach will have to be adopted by state governments as well too to support the overall effort. The writer is Chief Economist, Bank of Baroda and author of Corporate Quirks: The darker side of the sun. Views are personal
Mint
18 minutes ago
- Mint
Why Alaska? 5 reasons this remote state was picked for the high-stakes Trump-Putin summit
US President Donald Trump will meet with Russian President Vladimir Putin at a military base in Anchorage, Alaska on Friday for a high-stakes summit. The meeting could determine not only the trajectory Russia- Ukraine war but also the fate of European security, news agency AP said. The sit-down offers President Trump a chance to prove to the world that he is both a master dealmaker and a global peacemaker, the news agency said. It said that for Putin, a summit with Trump offers a long-sought opportunity to negotiate a deal that would cement Russia's gains, block Kyiv's bid to join the NATO military alliance, and eventually pull Ukraine back into Moscow's orbit. The venue for the high-profile meeting is Joint Base Elmendorf-Richardson, a US military installation on the northern edge of Alaska's most populous city- Anchorage Joint Base Elmendorf-Richardson is Alaska's largest military base. The 64,000-acre outfit is a key US site for Arctic military drills and readiness. But why Alaska for Trump-Putin meeting? Here are the key reasons for the choice of the location of the high-stakes meeting between the two glogal leaders: The 'Frontier State', Alaska, is geographically the closest point between the US and Russia, divided by the Bering Strait and resting just 55 miles away from the European country. Alaska, which was a Russian colony for more than 65 years. Also, Alaska has been the site of both cooperation and conflict between the two nations beginning, in part, with the purchase of the 49th state from the Russian empire. 'The symbolism of Alaska would be a reminder of how it was possible for the United States and Russia for most of the 19th century to transcend their ideological and political differences and their expansionisms, to have warm, friendly cooperative relations,' David S Foglesong, a history professor at Rutgers University - New Brunswick, told Time Magazine. Vladimir Putin is barred from entering the 125 countries that are parties to the Rome Statute due to an International Criminal Court (ICC) arrest warrant issued against him for war crimes. The US, however, doesn't recognise ICC jurisdiction, which means a summit in Alaska provides legal shield to Putin. 'No other country wants them to have this meeting on their territory,' Lee Farrow, professor and chair of Auburn University at Montgomery's history and world culture department was quoted as saying in Time Magazine. 'It will be easier to manage strategically from a safety standpoint, and Putin doesn't have to be worried about getting arrested by some kind of international court,' says Farrow who is the author of Seward's Folly: A New Look at the Alaska Purchase. Alaska also played a significant role during the World Wars, delivering thousands of aircrafts to the then-Soviet Union in World War II on ferries that traveled through the Bering Strait. The summit at Joint Base Elmendorf-Richardson will provide exceptional security and privacy. The base has Cold War roots and remains critical to US Northern defence infrastructure. Symbolically, Alaska later became the 'first line of defence' at the end of the Cold War, Brandon Boylan, a professor of political science and director of Arctic and northern studies at the University of Alaska Fairbanks told Time Magazine. Alaska and Russia share overlapping interests in the Arctic Circle. Both nations participate in the Arctic Council—though some of their work has been temporarily paused due to Russia's invasion—and maintain a history of scientific collaboration, according to reports. Alaska's proximity to Russia also gives it strategic significance for Arctic energy resources, shipping routes, and climate research, factors that could shape the Trump-Putin talks around access to critical minerals and energy supplies—resources that Ukraine's conflict has made increasingly pivotal for global markets. Political tensions between Russia and the US have worsened in recent decades. But relations were historically much friendlier, even before the purchase of Alaska, which was a Russian colony for more than 65 years. Alaska is non-contiguous US state in the far northwest of North America. It is part of the United States but not connected to the rest of the country. Alaska is the largest US state by area and considered to be the northernmost, westernmost, and easternmost state in the United States. The symbolism of Alaska would be a reminder of how it was possible for the United States and Russia for most of the 19th century to transcend their ideological and political differences. Alaska is one of the two non-contiguous US states, alongside Hawaii.
Hindustan Times
20 minutes ago
- Hindustan Times
Modi outlines vision centered around self-reliance, defence, pledges simpler GST
Atmanirbharta (self reliance) is the foundation of Viksit Bharat (developed India) and over-dependence on foreign powers can cloud freedom itself, Prime Minister Narendra Modi said on Friday, underlining that enhancing national security was a core mission to build a prosperous country by the centenary of independence in 2047. Today, I urge the young scientists, talented youth, engineers, professionals, and all departments of the government that we should have our jet engines for our own Made in India fighter jets. (PTI) In his customary address to the nation on Independence Day, Modi outlined an expansive vision for the next few decades with self-reliance and defence as its pillars, made a string of big-bang reform commitments especially in easing compliance and simplifying Goods and Services Tax, announced a high-powered mission to deal with infiltration, flagged global economic selfishness, and underlined his government's drive to achieve self-reliance in energy, critical minerals and semiconductors. In his 103-minute-long address – his longest ever from the ramparts of the Red Fort – Modi also hailed the armed forces and the prowess of Made-in-India weapons during Operation Sindoor, urged Indians to build jet engines and announced the formation of Mission Sudarshan Chakra, aimed at neutralising enemy defence infiltrations and enhancing India's offensive capabilities. PM Modi gave a 103-minute-long address – his longest ever from the ramparts of the Red Fort. (PMO) Among his major announcements were that India will roll out its first Made-in-India chip by the end of the year; 10 new nuclear reactors as part of the mission to increase nuclear power generation capacity by over 10 times in the next two decades; next-generation GST reforms to be unveiled on Diwali, reducing taxes on essential goods and providing relief to MSMEs, local vendors, and consumers; a a dedicated Reform Task Force to drive next-generation reforms; launching the PM Viksit Bharat Rozgar Yojana, announced by the Cabinet earlier, to benefit 30 million young Indians; a High-Powered Demography Mission to address the national security challenge of infiltration; and a National Deepwater Exploration Mission to tap ocean resources, alongside major expansions in solar, hydrogen, hydro and nuclear power. He also praised the Rashtriya Swayamsevak Sangh (RSS), the ideological fount of the Bharatiya Janata Party that is celebrating its centenary this year. 'For a nation, the greatest criteria for self-dignity is its self-reliance,' Modi said after a flypast of military helicopters scattered flower petals above an invited crowd of thousands in the historic Red Fort. 'The more a country is dependent on others, the bigger is the question mark on its independence.' Before his speech, two Mi-17 helicopters of the Indian Air Force flew over the Red Fort and showered flower petals. One chopper carried the Tricolour while the other displayed a banner of Operation Sindoor. The remarks came against the backdrop of US President Donald Trump's global trade war. In the last few weeks, Trump hit India with a 50% tariff rate, much higher than the regional peers. 'This is an opportunity to move ahead, to visualise big dreams, to sacrifice for our resolve. The government and I are with you and we will make history,' he said. Modi didn't name Trump or the US but highlighted global economic turbulence and how India was a bright spot in an otherwise glum scenario. But he reiterated his concern for farmers' welfare. 'Farmers, fishermen, cattle rearers are our top priorities. Modi will stand like a wall against any policy that threatens their interests. India will never compromise when it comes to protecting the interests of our farmers,' he said. India's protections for its agricultural sector and apparent reluctance to open it up to mega American farm companies was seen to be one of the bigger hurdles in protracted trade negotiations between the world's largest and fifth-largest economies. The agriculture sector accounts for nearly 18% of the country's gross domestic product and employs millions of small cultivators owning mostly tiny land parcels, who also form a large and sensitive political bloc. 'Today, when economic selfishness is rising day by day in the global situation, it is the need of the hour that we don't sit crying over those crises. We should not pull others down but enhance our capabilities. If we take that path, no selfishness will be able to entangle us,' he said. Highlighting Operation Sindoor, Modi said strategic autonomy and indigenous capabilities were key to decisively tackling threats, and added that self-reliance was the bedrock of national strength, dignity, and the journey to a developed India by 2047. 'Operation Sindoor showcased the marvel of India's military prowess, leaving our enemies stunned and unable to comprehend the advanced weapons that neutralised them in seconds. Without Aatmanirbhar Bharat, could we have executed Operation Sindoor on such a large scale? Our military's strength, bolstered by the 'Make in India' initiative, allowed us to act decisively and fearlessly,' the PM said. He also threw a challenge. 'Today, I urge the young scientists, talented youth, engineers, professionals, and all departments of the government that we should have our jet engines for our own Made in India fighter jets,' he said. He underlined a push for Swadeshi or indigenous products, saying shopkeepers should display boards for such items. 'Choose Made in India products, crafted by Indians, to bolster the 'Aatmanirbhar Bharat' initiative. Let's embrace this collective responsibility to drive change and transform the world,' he said. Modi stated that by 2035, the nation sought to expand, strengthen, and modernise its security framework, drawing inspiration from Lord Shri Krishna's Sudarshan Chakra. 'The nation will be launching the Sudarshan Chakra Mission. The entire system should be researched, developed, and manufactured in India, harnessing the talent of our youth. This powerful system will not only counter terrorist attacks but also strike back at the terrorists with precision,' he said. Modi also announced a 'double Diwali gift'. 'Over the past eight years, we implemented a major GST reform that significantly reduced the tax burden across the nation. Now, after eight years, the time has come to review it. We have formed a high-powered committee to begin this review process and have held consultations with the states as well. We are now bringing in next-generation GST reforms. This will become a Diwali gift for the nation. Tax rates on essential goods and daily needs will be reduced under a simplified framework. This will bring significant relief and convenience. Our MSMEs and small industries will also benefit greatly from these changes,' he said. Modi called infiltration 'a well thought-out conspiracy' to change the country's demography and announced a high-powered 'demographic mission' to tackle what he described as a massive crisis. Modi added that infiltration in border states can compromise national security and development. 'The country's demography is being changed as a part of a well-thought-out conspiracy. A new crisis is being created. And these intruders are snatching away employment opportunities of our youth,' Modi said. The comments came amid a major political tussle over the identification and deportation of allegedly undocumented Bangladeshis in Bharatiya Janata Party (BJP)-ruled states. The Opposition has attacked the Centre over the harassment of Bengali-speaking people in various states. Undocumented immigration is a major issue in Assam and West Bengal, two border states going to the polls next year. Modi also blamed previous governments for slow-pedalling on critical sectors such as semiconductors, and attacked the Congress for imposing the Emergency. 'This is a technology-driven century. Whichever country embraced technology, they reached great heights…You'll be surprised to know that semiconductors, which have now become the backbone of many nations, the files of those plans in India were stuck, left and forgotten. The thinking behind semiconductors was killed before birth. We lost 50-60 years. Many countries in the meanwhile continued to gain strength in semiconductors. But today, we are rid of that burden,' said the PM. He also said India was on its way to achieving self-reliance in critical minerals – such as lithium, cobalt, rare earth and graphite that have diverse applications ranging from electronic chips and home appliances to electric vehicles and solar panels – and highlighted his government's record in promoting solar, hydrogen, hydropower and nuclear energy. 'In energy, we are dependent on other countries. We have to make ourselves Atmanirbhar…we should build our own EVs and EV batteries. I want to tell the pharma sector to focus on research and development of cheap and best medicines. I want to tell companies to make fertiliser in India for self-reliance.' 'Swadeshi should not come from a place of desperation (majboori) but of strength (mazbooti).'
