US trade negotiators in India: 5 things to watch out for as gaze fixes on BTA talks

India and the United States have resumed trade talks in New Delhi after a period of heightened tensions. The discussions, led by US Trade Representative Brendan Lynch, aim to address key issues such as tariffs, energy imports, and market access to strengthen bilateral economic ties.

The India-US Bilateral Trade Agreement (BTA) negotiations had stalled a few weeks ago when US President Donald Trump announced new tariffs on Indian imports. Speculation suggested the move was linked to Trump’s Nobel ambitions and Prime Minister Narendra Modi’s refusal to let him claim credit for a ceasefire with Pakistan to halt Operation Sindoor.

A US trade delegation, led by Lynch, arrived in New Delhi on Monday night (September 16) for talks with India’s commerce ministry on Tuesday. The visit comes amid fresh US tariffs and a slight easing of tensions following an exchange of greetings between Trump and Modi on social media.

This marks the first in-person engagement since the trade deal talks collapsed. Officials in New Delhi told The Indian Express that the US team is expected to stay only for a day.

The delegation was originally scheduled to visit on August 25 for the sixth round of BTA talks, but two tariff moves—on August 7 and August 27, totalling 50 per cent in direct levies—had put negotiations on hold.

The visit aims to revive BTA talks, with five key questions likely to shape India-US trade relations in the coming months.

1. Will the US roll back 50 per cent tariffs on Indian imports?

The focus of this round is Trump’s tariffs. This is the first BTA discussion under the shadow of Trump’s surprise 50 per cent tariff announcement, which derailed trade and diplomatic progress built over three and a half decades.

Trump and his aides have criticised India for buying Russian oil, pressuring New Delhi to source crude elsewhere.

India, however, emphasises its strategic autonomy. Ministers have repeatedly said India will continue to buy oil from sources that offer cheaper prices, crucial for fiscal discipline given that India imports up to 85 per cent of its oil needs.

Trump’s trade adviser Peter Navarro told CNBC on Monday: “India is coming to the table. Prime Minister Modi sent out a very conciliatory, nice, constructive tweet, and President Trump responded to that. We’ll see how this works.”

Commerce Minister Piyush Goyal expressed optimism, saying a first tranche of the trade deal could be finalised by November 2025, “In February 2025, Prime Minister Narendra Modi and President Trump together instructed us that the ministers of both sides should make a good agreement by November 2025.”

2. Will India agree to halt or reduce Russian oil imports?

India is unlikely to halt Russian oil purchases. PM Modi has resisted US pressure over imports, which the Trump administration views as funding Russia’s war in Ukraine.

What to watch: Whether the US will press Russian oil imports during trade talks or treat it as a separate geopolitical issue. India’s chief negotiator, Rajesh Agrawal, said only trade-related matters would be discussed.

Sergio Gor, Trump’s nominee for Ambassador to India, told Senators during his confirmation hearing:
“Getting India to curb its purchases of Russian oil is a top priority.”

He added that Trump made it “crystal clear” that India would have to end all Russian oil imports, which make up 35–40 per cent of India’s intake.

US Commerce Secretary Howard Lutnick also said trade negotiations would be resolved “once” India stops buying the oil, suggesting it is a precondition for any deal.

India has not taken overt action against US tariffs so far. The first 25 per cent reciprocal tariffs went into effect on August 7, affecting exports such as garments. Trump’s additional tariffs took effect on August 27, and India hopes for a shift in US stance.

3. Will the US get access to India’s agriculture and dairy markets?

A major sticking point in earlier negotiations was US access to India’s agricultural and dairy markets. India resisted, citing farmer livelihoods and cultural sensitivities, especially regarding dairy products.

What to watch: Whether the US softens its demands. Speculation suggests limited imports—like premium cheese or GM corn for ethanol—may be considered to avoid disrupting India’s domestic market.

Earlier talks completed five rounds since March. India refused to open sensitive sectors due to cultural, economic, and health concerns, particularly GMOs and animal-based feed in US dairy products.

4. Will India soften its stance on digital services tax and data localisation?

The US has raised concerns about India’s digital services tax (DST) and data localisation rules, which affect American tech and e-commerce firms.

What to watch: Any progress on digital trade policies. While not expected to be resolved in an interim deal, discussions will indicate the direction for a more comprehensive BTA.

India phased out its unilateral DST (Equalisation Levy) in April 2025 under the global OECD two-pillar solution, shifting taxation to the location of customers. Data localisation rules mandate local storage of certain personal and financial data, with strict enforcement in sectors such as finance under the Reserve Bank of India.

5. Can India and the US close the BTA by November?

The latest round focuses on Trump’s tariff moves. It is the first discussion under the shadow of his 50 per cent tariff announcement, which disrupted decades of trade and diplomatic relations.

Trump and aides have pressed India on Russian oil, while India has maintained its strategic autonomy. Ministers emphasise sourcing cheaper oil to maintain fiscal stability.

In February 2025, PM Modi and Trump instructed trade ministers to conclude the first phase of the BTA by November 2025. Tariff-related setbacks stalled progress, but renewed optimism has emerged.

What to watch: Concrete progress or a firm timeline for the next formal round. Virtual meetings had continued but achieved limited results until the US delegation’s in-person visit.

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