New Delhi, Jan 23: Negotiations between India and the United States on a long-awaited bilateral trade agreement have intensified, with senior officials indicating that an understanding is within reach, though disagreements over agricultural market access continue to delay closure.
Commerce Ministry sources said discussions were progressing rapidly following political assurances from US President Donald Trump, who recently expressed confidence in a favourable outcome and described Prime Minister Narendra Modi as a close partner. Officials on both sides view the remarks as an indication that remaining obstacles could be addressed through high-level engagement.
According to officials, momentum has also been strengthened by Washington’s invitation to India to join the US led “Pax Silica” initiative, a strategic framework aimed at securing global supply chains for semiconductors, artificial intelligence hardware and other critical technologies. New Delhi is expected to formally participate as a full member in the coming weeks.
Diplomatic sources described the move as an important signal of strategic trust that could help bridge economic differences, even as negotiators acknowledge the complexity of the talks.
Broad convergence, limited friction
Former External Affairs Ministry official Pinak R Chakravarty said negotiators had reached alignment on several key areas, though select issues remained unresolved. He noted that discussions had advanced on lowering duties across sectors such as automobiles, electronics, advanced medical devices and premium US agricultural exports.
Indian negotiators have also reportedly offered enhanced access in non-trade areas, including defence procurement and increased purchases of American crude oil, while gradually reducing reliance on Russian energy supplies.
However, agriculture continues to be the most sensitive issue. Trade experts involved in the talks said the United States is seeking deeper access to India’s foodgrain and dairy markets areas New Delhi considers politically and economically sensitive.
Former Indian Institute of Foreign Trade professor Biswajit Dhar said India’s position is driven by the need to protect small and marginal farmers whose livelihoods depend on staple crops and dairy production. He added that while limited tariff adjustments may be possible, unrestricted access would be difficult to justify domestically.
Trade imbalance and strategic compulsions
Despite tariff uncertainty, India’s exports to the United States crossed the USD 100 billion mark in 2025, up significantly from the previous year, according to US government data and economic estimates. The US trade deficit with India, already substantial, is projected to widen further in 2025.
Experts believe proposed tariff reductions on select farm products, pulses and defence related purchases including drones, aircraft and surveillance systems could narrow the gap, though not eliminate it entirely.
Tensions had escalated last year after Washington imposed steep tariffs on Indian imports, officially citing New Delhi’s continued purchase of Russian oil. Analysts, however, viewed the move as leverage in trade negotiations rather than a purely geopolitical response.
Despite periodic strains including disagreements over regional security issues and diplomatic frictions involving Pakistan Negotiations between India and the United States on a long-awaited bilateral trade agreement have intensified, with senior officials indicating that an understanding is within reachstrategic analysts argue that broader geopolitical realities continue to bind the two countries.
With the United States seeking reliable partners amid its rivalry with China and India aiming to secure technology access and stable export markets, both sides appear committed to finding common ground.
As Chakravarty observed, sustained engagement over the past two decades has created enough strategic investment on both sides to ensure that temporary disagreements do not derail the larger partnership.