US trade negotiator in India for one day discussion on India-US FTA on September 16

US trade negotiator Brendan Lynch will arrive in Delhi tonight for a one-day discussion on India-US Free Trade Agreement (FTA) negotiation. The India-US bilateral trade agreement talks were in full swing until US President Donald Trump announced unilateral imposition of 50 % tariffs on goods originating from India last month.

The decision had also slowed down the bilateral FTA talks as the US negotiators cancelled a scheduled visit to India in August. The one-day visit of US trade negotiators comes after both Trump and Indian Prime Minister Narendra Modi posted friendly messages on social media as mutual desire to continue the talks for cooperation in bilateral trade.

Senior Commerce Ministry officials said Lynch’s visit is not the sixth round of official negotiations, but a precursor to further official trade talks between the two countries.

Incidentally, trade negotiators of both countries had continued to be in touch through weekly virtual meetings even when formal India-US talks faced a temporary setback in the wake of the punitive tariffs US imposed on India.

It was during Modi’s visit to Washington in February both leaders launched the new initiative “U.S.-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century” to drive transformative change across key pillars of cooperation. Under this initiative, they had committed to a results-driven agenda with initial outcomes this year to demonstrate the level of trust for a mutually beneficial partnership.

The joint statement issued after the meeting had said India and US will negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025. The proposed BTA is meant to strengthen and deepen bilateral trade across the goods and services sector, and will work towards increasing market access, reducing tariff and non-tariff barriers, and deepening supply chain integration.

Trump’s tariff measures came in the midst of BTA negotiations. The US had initially imposed a 25% tariff on a substantial number of goods of India-origin stating the country was having a trade deficit with India. Another set of additional 25% tariff got imposed as a punishment for continuing trade relationship with Russia in spite of US wanting India to stop the purchase of cheap Russian oil.

The tariffs continue to be in force, and the impact of the additional tariff on Indian exports to US is expected to get reflected in India-US trade numbers in the coming months. An early progress in India-US trade talks could be good news for Indian exporters.