Trump-Modi Call Fails to Resolve Uncertainty Over India-US Trade Deal
New Delhi/Washington, October 2, 2026:
U.S. Trade Representative Jamieson Greer said on Thursday that negotiations with India were continuing but that a deal was not imminent. He said officials from both countries had identified the major issues still standing in the way of an agreement and were working to address them.
“I don’t think it is imminent,” Greer told reporters, while describing his recent discussions with Indian Commerce and Industry Minister Piyush Goyal as constructive.
The comments came a day after Trump and Modi spoke by telephone about bilateral cooperation, including trade, defence, energy and critical technologies. According to New Delhi, the two leaders also discussed broader regional and global peace and security issues and agreed to maintain close engagement on the bilateral relationship.
Goyal Pushes for an Interim Agreement
Goyal is currently in the United States for talks aimed at advancing negotiations on an interim trade agreement and a broader bilateral trade deal.
He met Greer on the sidelines of the G20 trade ministers’ meeting in Milwaukee. Following the meeting, Goyal said the two sides had discussed efforts to conclude an interim agreement that would be balanced and mutually beneficial.
The two governments have been negotiating a broader bilateral trade agreement for months. A framework announced earlier this year envisaged reductions in tariffs and expanded market access, while leaving several sensitive issues for further negotiations.
The latest discussions suggest that progress has been made, but important differences remain.
Russian Oil Remains a Sensitive Issue
One of the most difficult issues is India's continued purchase of Russian crude oil.
Washington has repeatedly raised concerns about India's energy relationship with Moscow, particularly because of Russia's war in Ukraine. The United States has argued that continued purchases of Russian oil provide an important source of revenue for Moscow.
India, however, has maintained that its energy purchases are primarily driven by energy security, price considerations and the need to diversify supplies.
The issue has also become intertwined with U.S. tariff policy. Earlier this year, Washington announced that India would face an 18% reciprocal tariff under the framework announced by the two countries, while also linking the removal of an additional 25% tariff to India's commitment to stop purchasing Russian oil.
The conflicting positions have complicated the broader trade negotiations.
Agriculture Presents Another Major Challenge
Agriculture remains another politically sensitive area.
India has sought to protect sections of its agricultural sector that are considered particularly important to domestic producers. New Delhi has historically maintained relatively high barriers for several agricultural imports, reflecting concerns about the impact of foreign competition on millions of farmers.
The United States, meanwhile, has pushed for greater access for American agricultural products in the Indian market.
A framework announced in February envisaged Indian tariff reductions on a range of U.S. industrial, food and agricultural products while also recognising India's need to maintain protections in certain sensitive areas.
Negotiators still have to determine how far each side is prepared to go on market access.
Tariffs at the Centre of Negotiations
Tariffs remain a central element of the negotiations.
Under the February framework, the United States said it would apply an 18% reciprocal tariff on originating Indian goods while potentially removing tariffs on a range of products, including generic pharmaceuticals, gems and diamonds and certain aircraft parts, subject to completion of the interim agreement.
India, for its part, has sought improved market access for its exporters and more predictable tariff treatment in the U.S. market.
The two sides also intend to address non-tariff barriers, technical standards, customs procedures, digital trade, services, investment and other structural issues as part of the wider bilateral trade negotiations.
Different Emphasis From New Delhi and Washington
The latest statements from the two sides suggest that they are assessing the negotiations from somewhat different perspectives.
Indian officials have highlighted areas where the two countries have already made progress and have stressed the possibility of concluding an interim agreement.
Greer, meanwhile, has focused on the issues that remain unresolved. He said U.S. and Indian officials had identified the outstanding areas and were continuing discussions to narrow their differences.
That difference in emphasis does not necessarily indicate a breakdown in negotiations, but it underscores the difficulty of resolving the final issues in a complex trade agreement.
Leaders Maintain Contact
Trump and Modi's latest conversation demonstrates that trade remains part of a broader strategic relationship encompassing defence, energy and critical technologies. New Delhi said the leaders reaffirmed their commitment to strengthening the bilateral strategic partnership.
Goyal's visit to the United States is also intended to keep negotiations moving, with Indian officials seeking an early interim arrangement while continuing discussions on a more comprehensive trade agreement.
For now, however, Washington's assessment that a deal is not imminent suggests that the remaining disputes—particularly over energy, agriculture and market access—will require further negotiations.
Both governments remain engaged, but the timing of a final agreement remains unclear.
Comments
Post a Comment