US President Donald Trump signalled a potential thaw in India-US trade relations, saying discussions with New Delhi were “going good” and that he could visit India next year if invited by Prime Minister Narendra Modi.
Speaking at the White House, Trump praised Modi as “a great man” and “a friend”, adding that India had “largely stopped buying oil from Russia”.
His remarks mark a shift in tone after months of friction over tariffs, energy imports, and visa policies that had strained ties between the two democracies.
Trade negotiations gain new momentum
Trump’s comments suggest renewed progress in talks that had stalled amid disputes over trade barriers and market access.
India currently faces tariffs of up to 50% on its exports to the United States, a rate higher than the 47% duties imposed on Chinese goods.
These measures have been a major source of tension between the two economies, affecting sectors such as textiles, steel, and pharmaceuticals.
Washington’s decision to raise the H1B visa fee to $100,000 added to the strain, as did Trump’s past assertions that he had brokered a ceasefire between India and Pakistan—claims that drew sharp responses from New Delhi.
Despite this backdrop, officials on both sides appear more optimistic that a comprehensive trade agreement could be reached in the coming months.
Russian oil at the centre of talks
Energy trade has emerged as one of the most delicate issues.
While Trump claimed India had “largely stopped buying oil from Russia”, data shows that a complete withdrawal remains unlikely.
Discounted Russian crude has helped India cushion domestic fuel prices and limit inflation, making it an important component of its import basket.
US sanctions on Russian oil giants Rosneft and Lukoil are already prompting refiners in India and China to reduce purchases.
Russian crude is now selling at its steepest discount to Brent in a year as Asian buyers scale back orders.
Tariff reductions possible by year-end
Experts said negotiations could lead to tariffs on Indian exports being cut from 50% to around 20% by the end of the year, or possibly sooner.
This would align India more closely with peers such as Vietnam, Thailand, and the Philippines, though still above the 15% tariff levels of Japan and South Korea.
Hermann cautioned that the path to an agreement remains complex.
Agricultural imports, investment commitments, and India’s continued ties to Russian energy supply chains are among the key obstacles.
While both governments are motivated to conclude a deal, progress will depend on the scope of concessions each side is willing to make.
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