India hopeful of resuming trade talks with US soon; govt works on support measures to help exporters
New Delhi: India is hopeful of resuming trade negotiations with the United States soon, even as the government works on a series of support measures to help exporters cope with the impact of steep US tariffs, a senior official said on Thursday.
“Both (25 per cent reciprocal tariff and another 25 per cent penalty for buying Russian oil) need to be resolved to strike the deal,” the official added, noting that new dates for the next round of discussions have not yet been finalised.
The official explained that while negotiations had been progressing well, the sixth round of talks was postponed due to these tariff issues. “We hope that we will get back to the table soon. Whenever the deal is struck, the tariff issues need to be addressed,” the official said.
India and the US began bilateral trade agreement (BTA) negotiations in March, completing five rounds so far. The sixth round, initially scheduled for August 25, was postponed by the US. The delay comes as Washington presses for expanded market access in politically sensitive sectors such as agriculture and dairy, which India has said could harm small and marginal farmers.
“Retaliation and negotiations cannot go hand-in-hand. Right now, the talks are only postponed, it has not been taken off the table. So, why should we be worried? Retaliation is something which we can do at any point of time,” the official added, referring to India’s rights under World Trade Organisation norms to impose retaliatory duties against US taxes on steel, aluminium, and automotive products.
The government has signalled its willingness to reach a deal that is in the national interest. “We are engaged. We feel that India and the US are complementary economies and both countries need to arrive at a deal, but a deal which is a win-win proposition and which is in the national interest of both the countries,” said the official, who declined to be named.
At the official level, extensive engagement continues. On August 26, senior officials of India and the US discussed trade, investment, critical minerals, energy security, and civil nuclear cooperation through the ‘2+2 Intersessional Dialogue’. “That means the engagement between the two countries is going on and on the trade front also, the engagement at commerce ministry level is going on. We are talking to each other,” the official added.
The two nations aim to conclude the first phase of the BTA by fall 2025, targeting a doubling of bilateral trade to $500 billion by 2030 from the current $191 billion.
Meanwhile, the US has imposed a 25 per cent tariff on Indian goods starting August 7, with an additional 25 per cent penalty taking effect from August 27 over India’s purchase of crude oil and military equipment from Russia. India has described the US move as “unfair, unjustified and unreasonable.”
During April-July 2025, India’s exports to the US grew 21.64 per cent to $33.53 billion, while imports rose 12.33 per cent to $17.41 billion. The US remains India’s largest trading partner during this period, accounting for around 20 per cent of total exports in 2024-25.
Defending India’s energy ties with Russia, the Ministry of External Affairs stated that imports are based on market factors and aimed at ensuring energy security for the country’s 1.4 billion population.
Prime Minister Narendra Modi, on August 15, reaffirmed that India would protect the interests of farmers and fishermen, saying the country would not compromise on their livelihoods.
In response to the US tariffs, the Indian government is preparing a series of support measures for exporters to mitigate the impact of the 50 per cent duties, a government official said.
“The government is seized of issues being faced by exporters, and positive work is going on to help them,” the official said, highlighting plans for diversification of the export basket, rollout of new free trade agreements, and promotion of domestic markets.
Among the measures under consideration are emergency credit line guarantees for MSME exporters in tariff-hit sectors, moratoriums on export loans to prevent asset downgrades, and extensions of export realisation periods to ease cash flow pressures. The government is also accelerating the export promotion mission and the e-commerce export hub scheme.
“The government is trying to speed up the rollout of the export promotion mission and expediting the e-commerce export hub scheme,” the official added. The mission, announced in the Budget, is projected to involve support measures worth around Rs 25,000 crore over six financial years (2025-2031) through two sub-schemes—Niryat Protsahan (over Rs 10,000 crore) and Niryat Disha (over Rs 14,500 crore).
The tariffs are expected to affect labour-intensive sectors such as machinery, shrimp, textiles, leather and footwear, and gems and jewellery, as higher taxes may make Indian goods less competitive against countries like Vietnam, Bangladesh, and Thailand, which face lower tariffs in the US market.
Exporters have requested interventions such as resumption of interest subsidies for five years, working capital support, low-cost credit, and moratoriums on loan repayments for up to a year. “We are considering their suggestions. We are trying something tangible with
long-term benefits,” the official said, adding that losses from tariffs would be short-term, although exporters fully dependent on the US could face major challenges.
The commerce ministry is also conducting a series of meetings to explore export diversification and new markets. India’s exports to the US during the first four months of the fiscal year rose 21.64 per cent to $33.53 billion, though roughly half of this trade falls outside the scope of the 50 per cent tariffs.
Meanwhile, the Federation of Indian Export Organisations (FIEO) said that Finance Minister Nirmala Sitharaman assured an exporters’ delegation on Thursday that the government is fully committed to safeguarding their interests amidst the new tariffs.
“The Finance Minister reassured the delegation that the government stands firmly behind Indian exporters in this hour. She emphasised that the government is committed to addressing all concerns of the exporting community and will explore every possible avenue to safeguard their interests,” FIEO said.
The delegation, led by FIEO President S C Ralhan, outlined the challenges posed by the recent US tariff escalation. The government’s assurances and planned support measures are aimed at cushioning exporters and sustaining India’s trade momentum while negotiations with the US continue.
