New Delhi
US President Donald Trump has indicated that the long-negotiated bilateral trade agreement (BTA) with India was on track, but did not share details on where the discussions are stuck or whether a pact could be sealed despite New Delhi buying Russian oil.
“I am doing a trade deal with India and I have great respect and love for Prime Minister Modi. We have a great relationship,” Trump said at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in South Korea.
Indian negotiators, who were in Washington the week before Diwali to take forward the BTA talks, had fruitful discussions with their counterparts, with the two sides reaching consensus on “most issues” and legal texts being prepared, sources said.
However, the Indian side was disappointed that, despite all the progress, the deal remained stuck over some “crucial matters” that include India’s purchase of Russian oil that Trump wants “reduced to nothing”.
Russian oil clause blocks tariff rollback
“The last meeting between negotiators from India and the US in Washington, held earlier this month, resulted in most issues getting sorted out, including those related to increased market access for US products in India. However, Trump’s consent is still elusive as a couple of crucial details are yet to be settled including India’s sourcing of Russian oil,” a source tracking the matter told businessline.
While there are talks around the US paring tariffs on India to levels lower than the 19-20 per cent tariffs imposed on competing countries such as Bangladesh, Vietnam and Indonesia, there is no assurance yet on the removal of the tariffs linked to Russian oil purchases.
Of the 50 per cent tariffs imposed by Washington on most Indian goods, 25 per cent is a penalty for the purchase of Russian oil. “The entire penalty for Russian oil purchase has to be rolled back for the India-US BTA to happen, as with those tariffs the deal will be of no use to India,” the source said.
India weighs US oil buys, farm access
Following his Diwali call with the Indian PM, Trump said that India had agreed to reduce its oil purchases from Russia to “almost nothing” by year-end. However, despite the US imposing sanctions on Russian oil companies Rosneft and Lukoil, New Delhi has not agreed to follow the diktat.
The issue of US demand for market access for its agricultural products, especially soya and corn, also needs to be ironed out.
Trump also said he prevented a war between India and Pakistan this year by threatening both nations with 250 per cent tariffs. He said he told Modi that there will be no trade deal if the war didn’t stop and he gave a similar warning to Pakistan.
ENDS
Published on October 29, 2025
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