India and US Continue Negotiations on First Tranche of Trade Deal
Key Facts
An Indian official said his country and the United States are continuing negotiations on the first tranche of a proposed bilateral trade deal, signaling that talks remain on track despite stalling at earlier points. The comments came after the Republican Party lost control of both chambers of Congress in the US midterm elections on November 3. The open talks keep trade between the two countries on the agenda, without indicating a set date for signing the deal. Indian Finance Minister Nirmala Sitharaman had described the negotiations on October 5 as deadlocked. She said at the time that making further concessions could be difficult.
The official said recent US-India discussions covered customs issues and trade facilitation, two areas directly tied to how cross-border trade is carried out. The talks are part of a broader process that began months ago, when a delegation from the Office of the US Trade Representative visited India from June 1 to 4 to advance negotiations. The two sides discussed goods, customs procedures and trade facilitation during the visit. The focus on these issues reflects continued work on the deal's technical details. But sources did not set a timeline in the current comments for completing or signing the first tranche.
The White House announced a framework in February that it said would lower reciprocal US tariffs on India from 25% to 18%. The framework also included an Indian commitment to eliminate or reduce tariffs on US industrial goods and a range of food and agricultural products. These commitments place lower US tariffs and opening the Indian market to US exports at the center of the proposed trade-off. The White House said the tariff cuts were part of the framework, with negotiations continuing on a broader deal. The tranche under negotiation therefore remains tied to resolving details on market access and tariffs between the two sides.
India's purchases of Russian oil remain a source of tension in the negotiations, alongside US tariffs, according to the Associated Press, which cited them as reasons for the talks stalling. In October, US Secretary of State Marco Rubio said the two sides were very close to a deal, with a small number of issues left to close. The agency quoted him as saying: "We're very, very close. I would say we're as close as you can get without signing the deal." He added that "a small number of issues still need to be resolved." The remarks point to declared progress in negotiations, while differences over energy and tariffs indicate issues that remain unresolved.
Reaching a trade understanding is increasingly important for Indian exporters, as the United States is India's largest export destination. Indian goods shipments to the US market totaled 42.79 billion dollars between April and August 2026, compared with 40.39 billion dollars in the same period of 2025. In broader trade, the Office of the US Trade Representative estimated total goods and services trade between the two countries at about 239.6 billion dollars in 2025, up 12.1% from 2024. The figures show the scale of the trade ties whose terms are being negotiated. India's reliance on the US market also makes tariffs and customs clearance procedures matters with a direct effect on trade flows.
The scope for a settlement is narrowing because of the Russian oil issue, according to Reuters, after US President Donald Trump signed a law giving him authority to impose tariffs of up to 100% on countries that buy large quantities of Russian oil, including India and China. A reduction in India's purchases of Russian oil could put pressure on fuel prices or government finances, according to the report. That leaves New Delhi balancing trade terms with Washington against domestic energy considerations. As negotiations on the first tranche continue, potential tariffs linked to oil purchases remain a significant point of disagreement in the scope for a settlement. The Indian official did not announce a date for completing the deal or details on how the issue would be addressed.