US-India trade ties have witnessed increased diplomatic and economic interaction in October 2025, with both nations moving closer towards the conclusion of a much-awaited trade agreement. Five negotiating rounds have already been conducted, with authorities noting that the majority of contentious issues have been addressed and the deal is “very near” to being finalised.
Key Developments in Negotiations
The Donald Trump administration had slapped considerably high tariffs (as much as 50%) on certain Indian exports in August 2025, including crude oil purchased from Russia. This action came as Washington looked to extract leverage to persuade New Delhi to reduce Russian oil imports. In exchange, talks have centered on general tariff cuts by the US, possibly reducing duties on Indian exports to 15% to 16% in addition to Indian pledges of diversifying energy imports and expanding market access for select US agricultural products.
India’s Position: No Hasty Deals
Commerce Minister Piyush Goyal has been categorical that India will not rush into trade deals or accept strict conditions from partner nations. He reasserted that the only concern of India is to protect national interest, underlining that trade agreements should be founded on long-term mutual gain, not deadlines or pressure from outside. Goyal asserted that talks continue unabated not just with the US but also with the EU and other international players.
Strategic Issues and Energy Security
President Trump consistently asserted India would significantly cut Russian oil imports as part of trade agreement negotiations, although Indian authorities have downplayed the idea of any legally binding commitment in this regard. As Russia supplies a third of India’s imports of oil, New Delhi has stuck to keeping supply chain resilience and affordability of energy for its 1.4 billion citizens intact. Both countries continue to evaluate frameworks permitting periodic re-examination of tariffs and market access.
Expected Impact and Forecast
Both governments anticipate that the US-India trade agreement, once inked, will appreciably enhance bilateral flows, mitigate uncertainty, and make joint leadership in Indo-Pacific region trade more powerful. India’s exports to the US amounted to $86.51 billion in the March 2025 fiscal year, and additional rises are expected if tariffs are reduced as suggested. A formal release of the final trade agreement can be coinciding with the imminent ASEAN summit in Malaysia, where President Trump and PM Modi are due to meet, though neither of them has confirmed.
Nutshell: Enhanced Economic Partnership Ahead
With the differences for the most part bridged and the intent mutual, the US-India trade agreement is poised for realisation. Strategic energy and tariff incentives, combined with a strong resolve to reciprocal fair trade, could usher in a new era of prosperity and cooperation between the globe’s two largest democracies.
