New Delhi: India is hopeful of resuming negotiations with the US on the proposed bilateral trade agreement (BTA), and resolving the issue relating to the steep 50 per cent tariff on Indian goods imposed by Washington will be key to striking the deal, a government official said on Thursday.
However, the official said the new dates for the next round of negotiations for the agreement have not yet been finalised.
“We have not finalised new dates because of the overhang of this (50 per cent) additional tariff. It was not practical to have official level discussions on the entire BTA (because of these high tariffs).
“Both (25 per cent reciprocal tariff and another 25 per cent penalty for buying Russian oil) need to be resolved to strike the deal,” the official said.
The negotiations were progressing well but because of this blip, the sixth round of talks got postponed.
“We hope that we will get back to the table soon,” the official said, adding whenever the deal is struck, the tariff issues need to be addressed.
The two countries started negotiations for BTA in March. So far, five rounds of negotiations have been completed. The US team, which was scheduled to visit India from August 25, for the next round of negotiations for the agreement, postponed the meeting.
The talks are paused as the US is pressing for greater market access in politically sensitive areas such as agri and dairy sectors, which India cannot accept as it affects the livelihood of small and marginal farmers.
When asked whether India will impose retaliatory duties on the US, the official said: “Retaliation and negotiations cannot go hand-in-hand. Right now, the talks are only postponed, it has not been taken off the table. So, why should we be worried?Retaliation is something which we can do at any point of time.”
India has reserved its rights under the WTO (World Trade Organisation) norms to impose retaliatory duties on the US against Washington’s taxes on steel and aluminium and auto and auto components.
The official added that the Indian industry’s key demand is that “we should do the deal in the best interest of the country”.
“We are engaged. We feel that India and the US are complementary economies and both countries need to arrive at a deal, but a deal which is a win-win proposition and which is in the national interest of both the countries,” said the official who did not wish to be named.
At the official level lot of engagements are going on. On August 26, senior officials of India and the US have discussed bilateral ties in the areas of trade and investment, critical minerals, and energy security, including strengthening civil nuclear cooperation.
The virtual talks held on Monday under the framework of ‘2+2 Intersessional Dialogue’ came against the backdrop of strain in ties between the two countries over the Trump administration’s policies on trade and tariff.
“That means the engagement between the two countries is going on and on the trade front also, the engagement at commerce ministry level is going on. We are talking to each other,” the official added.
The US and India have announced plans to conclude the first phase of BTA by fall (September-October) of 2025. The two countries are aiming at more than doubling the bilateral trade to USD 500 billion by 2030, from the present USD 191 billion.
While the 25 per cent tariff on Indian goods entering the US has come into effect from August 7, an additional 25 per cent announced on India as penalty for buying crude oil and military equipment from Russia, came into effect from August 27.
During April-July, the country’s exports to the US increased 21.64 per cent to USD 33.53 billion, while imports rose 12.33 per cent to USD 17.41 billion, according to commerce ministry data.
The US was the largest trading partner of India in the April-July 2025-26 period (USD 12.56 billion bilateral trade). India’s exports to America have been recording a positive growth since April this year.
India has described the US move to levy 25 per cent additional tariff on Indian goods as “unfair, unjustified and unreasonable”.
Defending India’s energy ties with Russia, the Ministry of External Affairs (MEA) has earlier said that the imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of the country.
The US accounted for about 20 per cent of India’s total exports in 2024-25. Indian exports account for about 2.5 per cent of the USA’s total imports.
Prime Minister Narendra Modi on August 15 said he will stand like a wall to protect the interests of farmers and fishermen and India will never compromise on their interests.
