Progress in India-US Trade Talks
Indian negotiators are making their way to Washington this week, indicating a potential thaw in trade talks with the United States. This follows a crucial meeting between the newly appointed US Ambassador Sergio Gor and key Indian leaders, including Prime Minister Narendra Modi, External Affairs Minister S. Jaishankar, and Commerce Secretary Rajesh Agrawal.
A central focus of these negotiations is addressing US concerns regarding India's imports of Russian oil. India has shown willingness to increase energy imports from the US, which could help smooth tensions and pave the way for a Bilateral Trade Agreement (BTA).
The atmosphere between the two nations appears to be improving, especially after a phone call between US President Donald Trump and Prime Minister Modi. The leaders have discussed the positive strides in trade negotiations, and there are speculations about a potential meeting during the ASEAN and East Asia Leaders’ Summit in Malaysia later this month.
This thaw in US-India relations comes at a time when talks between the US and China are facing challenges. President Trump recently made comments that may indicate a softer approach towards China, even as tensions remain high over trade tariffs.
The importance of the upcoming talks is underscored by the impact of current tariffs imposed by the Trump administration, which have begun to strain Indian small businesses significantly. A recent survey by the Confederation of Indian Textile Industry (CITI) revealed that many respondents experienced a drastic reduction in turnover due to decreased orders from American buyers.
Approximately 85% of surveyed businesses reported an inventory build-up, with many having to offer discounts ranging from 25% to remain competitive. Manufacturers are also feeling the pressure from extended credit cycles as the tariffs affect liquidity across the supply chain.
With the US being the largest export destination for India’s textile and apparel products, accounting for about 28% of total exports, the stakes are high. Exporters have expressed growing discomfort as they await a relief package from the Indian government, which is reportedly in the works. However, they are concerned that delays in addressing these issues may exacerbate the situation.
The Gem & Jewellery Export Promotion Council (GJEPC) has also sought urgent interventions from the government to support the sector, which has been hit hard by US tariffs. They have proposed measures such as allowing reverse job work by SEZ units and extending export obligation periods to help exporters navigate this challenging landscape.
