Oil, Tariffs, and Technology: Inside India–US Trade Negotiations

India and the US have entered a decisive phase in their trade negotiations, seeking to finalise the first tranche of a long-delayed Bilateral Trade Agreement (BTA) by November 2025. The latest discussions in Washington, led by Commerce Secretary Rajesh Agrawal, mark the most substantive progress in economic diplomacy between the two nations since the revival of the Trade Policy Forum in 2019. Negotiations have focused on four broad areas — market access, supply-chain resilience, digital standards, and tariff reform — with both sides signalling “constructive” progress. Officials hope to reach a partial accord before year-end, a move that could restore momentum to a relationship tested by tariff disputes and shifting geopolitical alignments.

India's Commerce Minister Piyush Goyal said that despite bureaucratic slowdowns in Washington, “the direction of travel remains positive”. Both governments are targeting a doubling of bilateral trade to USD 500 bn by 2030, from US$ 132bn in FY 2024-25, when India’s surplus with the US stood at US$ 40.8bn. The US remains India’s largest export market, led by engineering goods, pharmaceuticals, electronics and petroleum products.

The sharpest point of contention remains Washington’s 50% effective tariff on select Indian exports — a punitive extension of sanctions linked to India’s continued purchases of Russian crude oil. The US argues these flows dilute global efforts to constrain Moscow; India insists its energy strategy is guided by price stability and supply security, not geopolitics. Responding to the controversy, Randhir Jaiswal, spokesperson for India’s Ministry of External Affairs, said recently that India is a significant importer of oil and gas, and the country's priority  is to safeguard consumer interests in a volatile energy scenario. His comments followed President Donald Trump’s claim that Prime Minister Narendra Modi had assured him India would halt Russian oil purchases — a statement New Delhi has not confirmed. The MEA later clarified that India continues to diversify its energy basket, including deeper cooperation with the US, underscoring a pragmatic balance between global expectations and domestic needs.

To break the impasse, India has proposed a reciprocal energy-trade framework — offering to expand imports of US LNG and crude in return for tariff relief and enhanced market access. The proposal is seen as a tactical compromise: easing tariff pressures while strengthening energy interdependence that has already grown over the past decade. Negotiators are also shaping new chapters on digital governance, green technology, and critical-minerals cooperation — areas that could align India’s manufacturing and clean-energy ambitions with US efforts to de-risk supply chains and secure strategic resources. Agreement on data-flow and cybersecurity standards would mark a breakthrough after years of divergence on digital policy.

The talks unfold amid global uncertainty and the Trump administration’s widening tariff campaign. For New Delhi, progress in Washington enhances leverage with Beijing and Moscow, reinforcing India’s doctrine of strategic autonomy. For Washington, securing a deal with India offers a counterweight to China’s regional influence and a potential anchor for re-shaped global supply chains. As the sixth round of negotiations concludes, both sides are racing against political calendars — the US election cycle and India’s 2026 budget season. A breakthrough before November would mark a diplomatic success for both capitals, signalling that pragmatic economics still underpin a partnership too large, and too strategically vital, to be derailed by energy politics.