NEW DELHI: The US and India have resumed trade talks, the two countries’ leaders announced on social media on Wednesday, an unexpected move after Donald Trump’s administration imposed 50 percent tariffs on Indian goods.
Since the beginning of his global trade war earlier this year, the US president has been promising a trade deal with India. Last month, however, he doubled the total duty on Indian exports, citing New Delhi’s continued purchases of Russian oil.
The tariffs — the highest in Asia and among the greatest ever imposed on a major trading partner by any American administration — have caused a rift in India-US ties. New Delhi’s Chief Economic Adviser V. Anantha Nageswaran estimated they could reduce India’s gross domestic product by half a percent this year alone.
After weeks of tensions, in which India was seen recalibrating its relations with China after a years-long standoff, Prime Minister Narendra Modi took to X on Wednesday morning to say that US and Indian teams were again engaged in talks.
“India and the US are close friends and natural partners,” he said.
“I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership.”
Modi’s post was in response to Trump’s announcement on Truth Social that he was looking forward to speaking to his “good friend, Prime Minister Modi” in the coming weeks.
“I am pleased to announce that India, and the United States of America, are continuing negotiations to address the Trade Barriers between our two Nations,” he said. “I feel certain that there will be no difficulty in coming to a successful conclusion.”
In April, the Trump administration said it was imposing a 25 percent reciprocal tariff on Indian goods to rectify trade imbalances. Though a new deal was expected in July it was not approved by Trump, leading to a breakdown in talks.
In early August, the White House said India’s oil imports were helping fund Russia’s war in Ukraine and doubled the tariffs to 50 percent.
The new turn in negotiations comes after Modi’s recent visit to China, where he met with President Xi Jinping on the sidelines of the Shanghai Cooperation Organization’s leaders’ summit on Aug. 31.
The trip marked a thaw in relations between the Asian giants, which had been locked in a years-long standoff over their disputed Himalayan border.
The meeting with Xi has been seen as part of efforts to recalibrate India’s foreign policy, which over the past few years was strongly US-oriented.
Manoj Kewalramani, chairperson of the Indo-Pacific Research Program and a China studies fellow at the Takshashila Institution, said he expected engagements with Beijing to continue as part of a “process of defining a new equilibrium,” along with India’s participation in the SCO and BRICS — a grouping that includes Brazil, Russia, and China, and which is the most powerful geopolitical forum outside of the Western world.
“Delhi’s approach to Beijing is predominantly a function of India’s development, security and broader global interests,” he told Arab News.
“Expect this process to continue regardless of a deal with the US. Likewise, expect India to remain engaged with the SCO and BRICS. These are important platforms that further India’s multi-alignment policy.”
