The USA Leaders
September 12, 2025
Delhi – For years, the US-India Trade Deal has lingered in diplomatic limbo, hampered by tariffs, red lines, and geopolitical crossfire. But now, with both President Donald Trump and Prime Minister Narendra Modi signaling affirmative signs, the long-anticipated pact seems closer than ever. Will November 2025 finally mark the arrival of the “first tranche” of this game-changing deal—or will fresh disputes derail momentum once again?
Current Status
According to Commerce Minister Piyush Goyal, negotiations have reached an advanced stage, with Phase One of the US-India trade deal expected to be finalized by November 2025. Direct instructions from both Trump and Modi earlier this year have accelerated talks, which focus on tariff reduction, market access, and regulatory harmonization.
Despite optimism, several sensitive issues remain unresolved, particularly around energy, agriculture, and Russia-linked sanctions.
Key Issues and Conditions
At the heart of the talks is Washington’s demand that India halt Russian oil imports, a precondition tied directly to tariff relief. In recent months, the US has turned up the heat—slapping 25% extra duties on Indian crude transactions with Russia and a sweeping 50% spike on Indian imports overall.
For India, agriculture and dairy remain red lines. Delhi insists on protecting local farmers, resisting blanket duty-free access for American products. “Strategic autonomy” over commodities, officials say, cannot be compromised.
High-Level Engagement on US-India Trade Deal
The tone of negotiations shifted dramatically in early September when both Prime Minister Narendra Modi and President Donald Trump took to social media with conciliatory messages, signaling renewed warmth after months of tariff battles.
On X (formerly Twitter), Modi described the US and India as “close friends and natural partners.” He expressed confidence that the ongoing trade talks would “pave the way for unlocking the limitless potential of the India-US partnership.”
On Truth Social, Trump echoed the optimism, calling Modi a “very good friend” and asserting that “there will be no difficulty in coming to a successful conclusion for both of our Great Countries.” In a notable gesture, Trump reposted Modi’s message, describing him as a “great Prime Minister” and emphasizing the “special relationship” between Washington and New Delhi.
These exchanges marked a significant shift in tone—from punitive tariffs to partnership language—underlining that the trade talks now enjoy direct political backing at the highest level.
The Newest Concessions
US Concessions
- Considering a phased rollback of steep tariffs (up to 50%) on Indian goods.
- Offering expanded market access for Indian textiles and engineering exports.
- Willing to accept phased quotas on agricultural imports instead of immediate full liberalization.
Indian Concessions
- Ready to cut tariffs on up to 40% of US exports to India, especially industrial and technology goods.
- Committed to increasing purchases of US energy and defense equipment, reportedly up to $25 billion.
- Open to gradual tariff reductions on autos and alcoholic beverages, once considered off-limits.
Yet, sticking points remain: Russia-linked oil imports on one side, agriculture on the other.
High-Level Engagement
Both Trump and Modi struck optimistic tones in early September, emphasizing a desire to “resolve trade barriers quickly.” US Ambassador-designate Sergio Gor reinforced this optimism, saying the two sides are “not that far apart.”
India’s chief negotiator heads to Washington next week, with a direct Trump-Modi call expected soon—a sign that political will is firmly backing the technical talks.
Economic & Strategic Stakes
The potential impact is massive. The deal is designed to boost two-way trade toward $500 billion by 2030, giving US companies broader access to India’s 1.4 billion-strong market while easing tariff burdens on Indian exports like textiles, gems, seafood, and engineering goods.
But the geopolitical undercurrent is undeniable. The pact is unfolding as Washington recalibrates trade ties with Taiwan, Switzerland, and even China, tying India’s role more tightly into the US-led economic order. Ending Russian oil imports, in particular, could force India to rely more heavily on American and Middle Eastern crude—a strategic shift with long-term consequences.
Industry & Business Group Reactions
India Inc. has responded with caution. Export-heavy sectors like textiles and auto components welcome tariff relief but fear competitiveness losses if negotiations stall. The IT industry, meanwhile, is nervous about potential US service tariffs and visa tightening.
On the other side, US business groups are bullish. They argue that India represents a golden opportunity for job creation and manufacturing growth in America, while urging Delhi to open its markets to luxury goods, agriculture, and technology.
What India Gains vs. What the US Gains
India Gains
- Tariff Relief: Phased rollback of steep US tariffs (up to 50%) on textiles, gems, seafood, and auto components.
- Market Access: Expanded space for Indian textiles, engineering goods, and IT exports in the US.
- Energy Security Deals: Scope to lock in long-term US energy supply contracts to diversify beyond Russia.
- Technology & Defense Partnerships: Stronger alignment with US firms in manufacturing, defense, and emerging tech.
US Gains
- Market Entry: Wider access to India’s $3.9 trillion economy, especially in agriculture, luxury goods, and autos.
- Energy & Defense Sales: India’s commitment to buy $25 billion+ in US energy and defense equipment.
- Tariff Cuts: Reduced duties on US industrial goods, medical devices, automobiles, and alcoholic beverages.
- Strategic Leverage: India’s reduced reliance on Russian oil strengthens the US-led global trade order.
Bottom Line:
India wants tariff relief and secure exports. The US wants market access and geopolitical alignment. Both want to hit $500B in bilateral trade by 2030—but the road runs through tough compromises.
Near-Term Outlook of US-India Trade Deal
Both capitals appear committed to delivering a first-phase deal by November 2025. If successful, it could mark the boldest reset of bilateral trade ties in decades. But if Russian oil or agricultural red lines prove immovable, another cycle of stalemate could loom.
For now, markets, investors, and policymakers are all watching November with high anticipation. The question is simple: Will the US-India Trade Deal finally move from promise to reality?
