Indian media: India and the United States are close to reaching a trade agreement, with tariffs reduced from 50% to 15%.

Indian media: India and the United States are close to reaching a trade agreement, with tariffs reduced from 50% to 15%.

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India is nearing a pending trade agreement with the United States, which may significantly reduce punitive tariffs on Indian exports from 50% to 15-16%.

On October 21, according to Indian media mint citing insiders, India and the United States are close to finalizing a trade agreement. According to this agreement, the current punitive tariffs as high as 50% on Indian export goods are expected to be significantly reduced to 15%-16%.

Energy and agriculture have become the core issues as key bargaining chips in the negotiations. The mint report pointed out that India may agree to gradually reduce its imports of oil from Russia in exchange for tariff concessions from the U.S.

Earlier, according to the Times of India, the first phase results of the trade agreement are expected to be finalized between October and November. The goal of the agreement is to increase bilateral trade volume to $500 billion by 2030.

In September this year, India's exports to the U.S. plummeted due to high tariffs. At the same time, President Trump again warned India, closely linking its energy policy with trade tariffs, making the need to reach an agreement even more urgent for India.

Punitive Tariffs Severely Impact Indian Trade

The harsh tariff measures imposed by the United States have dealt a blow to Indian exports.

According to a report by research institute GTRI, since May, India's exports to the U.S. have declined for four consecutive months. Data show that in September this year, India's exports to the U.S. dropped to $5.5 billion, a sharp 20.3% month-on-month decline. Since the $8.8 billion peak in May, monthly trade volume has evaporated by more than $3.3 billion.

The report points out that September was the first full month during which most Indian goods faced the 50% tariffs imposed by Washington, and the sharp data decline highlights the direct impact of the tariffs. The tariff escalation started at 10%, increased to 25% in early August, and reached 50% by the end of the month. The report states:

Data confirm that since the escalation of tariffs began, the U.S. has become one of the two markets most severely hit among all India's export destinations.

The most severely hit sectors include key areas such as textiles, gems and jewelry, engineering products, and chemicals. The continued decline in exports has put huge pressure on related Indian industries and also become a strong impetus for India to seek an agreement with the U.S.

While trade negotiations are ongoing, political pressure from Trump is also increasing.

President Trump recently issued another warning to India, stating that if India does not stop importing oil from Russia, it may continue to face "massive tariffs."

Previously mentioned by Wallstreetcn, Trump also claimed that Indian Prime Minister Modi had personally assured him that India would stop buying Russian crude oil. When told that the Indian side had no record of such a conversation, Trump responded:

If they want to say that, then they can just continue paying massive tariffs, which they do not want to do.

India has responded firmly to this. Indian Foreign Ministry spokesperson Randhir Jaiswal stated that India had made no such promise, emphasizing that India's import policy is entirely aimed at protecting domestic consumers' interests and ensuring stable energy supplies. He stated:

This includes expanding our energy procurement base and proper diversification to adapt to market conditions.

Seeking a “Win-Win” Solution

Despite the tough rhetoric, trade negotiations between the two sides are still proceeding "in a friendly atmosphere."

According to the Times of India, Indian Federal Commerce Minister Piyush Goyal said last Saturday that the negotiations are progressing smoothly, but emphasized that India will firmly protect the interests of its farmers, fishermen, and micro, small, and medium enterprises.

The Times of India mentioned that the first phase results of the trade agreement are expected to be finalized between October and November 2025. The grand goal of the agreement is to more than double the bilateral trade from the current $191 billion to $500 billion by 2030. The United States has been India's largest trade partner for four consecutive years.

Indian officials pointed out that while about 45% of Indian export goods are currently not subject to U.S. tariffs, the two sides are still discussing at multiple levels to seek a "win-win solution."

The Indian side has clearly drawn "red lines" in fields such as agriculture, micro, small, and medium enterprises, digital trade, e-commerce, and intellectual property.

Whether these talks can break the deadlock while satisfying both sides’ core demands will have a profound impact on India-U.S. economic and trade relations in the coming years.

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