The U.S. trade representative signaled that a deal with India was not imminent after President Donald Trump spoke with Prime Minister Narendra Modi by phone, citing unresolved issues.
Sticking Points Remain
Jamieson Greer told the Indian news agency ANI that the two sides have identified the “universe of items that are sticking points” and that a pact is not “imminent.” Greer described the call between Trump and Modi as “very constructive.” The U.S. official also met with Indian Commerce Minister Piyush Goyal in Milwaukee, where the two discussed the “early conclusion of a mutually beneficial interim agreement under the India-US Bilateral Trade Agreement.”
Observers note that the final obstacles in any trade negotiation are typically the hardest to clear. The gap between the two positions suggests that significant work remains before any interim agreement can be signed. Ronak D. Desai, a visiting fellow at Stanford’s Hoover Institution, said that Goyal is counting the issues already resolved, and Greer is counting the ones that remain, adding that the last issues in any trade deal were the hardest.
Energy Security and Tariffs
The U.S. administration views New Delhi’s purchases of Moscow’s barrels as funding the war in Ukraine. As a result, India faces the risk of Washington imposing up to 100% tariffs, which could derail the trade talks.
Currently, Indian exports to the U.S. face a 10% tariff, following the conclusion of USTR’s investigation into the acts, policies and practices of forced labor in 60 countries. As per the Indian government, a substantial share of the country’s exports to the U.S., such as generic pharmaceuticals and smartphones, remain outside the scope of the 10% duty.