Listeners, the latest developments in US-India trade relations reveal a complex and tense landscape shaped largely by tariffs and strategic negotiations. A significant focal point remains the US's imposition of a 50 percent tariff on most Indian goods since August 2025. This unprecedented duty was primarily a response to India’s purchases of discounted Russian oil, which Washington argues indirectly supports Moscow's war in Ukraine. The tariffs have led to a steep 28.5 percent drop in Indian exports to the US within just five months, severely impacting labour-intensive sectors such as gems and jewellery, textiles, and seafood, where exports fell between 37 and 60 percent in recent months. This disruption poses a significant challenge to India’s goal of job creation and economic advancement.

On the trade negotiation front, US Trade Representative Jamieson Greer has characterized India’s latest proposals as the "best we’ve ever received," reflecting a cautiously optimistic tone amid ongoing talks aimed at addressing longstanding issues, including market access for agricultural goods. However, these talks remain fragile. President Donald Trump recently threatened additional tariffs on Indian rice exports, accusing India of “dumping” cheap rice in the US market, which he says harms American farmers. This threat adds fresh uncertainty and could complicate progress, as agricultural market access—particularly for staples like rice and wheat—remains a sticking point. Indian exporters and policymakers are closely watching these developments, as new tariffs could severely affect India’s competitiveness, especially in niche products like basmati rice, which forms a small but important part of exports to the US.

Despite these tensions, there are signs of gradual engagement. Smaller deals advancing include US approval for defense sales worth nearly $93 million and India securing a supply of about 10 percent of its liquefied petroleum gas (LPG) imports from the US. These energy commitments might help reassure Washington regarding India’s efforts to reduce reliance on Russian oil. Additionally, ongoing talks emphasize the dual tracks of negotiating tariff rollbacks and addressing reciprocal measures, underscoring the complexity of the bilateral relationship.

India continues to navigate a difficult balance between protecting its domestic industries and farmers while seeking to maintain and expand access to the lucrative US market. The evolving geopolitical context and trade policies under former President Trump’s legacy, including his “America First” strategy, keep this relationship dynamic and at times contentious.

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