India, US make 'progress' for joint trade-oil deal as talks move forward

Chief negotiator returns from New York after fresh parleys

India and the US are negotiating a comprehensive resolution that addresses both the pending issues in their trade deal and Washington’s concerns over New Delhi’s continued purchase of Russian oil. 

“We want to address it comprehensively rather than piece by piece. There has to be some sort of agreement at the higher levels to President Donald Trump’s satisfaction that we have a way forward to ultimately reduce and eliminate India’s Russian oil purchases. The oil issue is the thorniest. When that’s resolved, the others won’t be too tough to negotiate,” said a US official who did not wish to be named. 

An Indian delegation led by Commerce Minister Piyush Goyal held talks with US Trade Representative Jamieson Greer in New York earlier this week. External Affairs Minister S Jaishankar, who is in the US to participate in the United Nations General Assembly, also held discussions with his counterpart Marco Rubio. 

An Indian official said that while Goyal was still in the US, India’s chief negotiator Rajesh Agrawal returned to New Delhi on Wednesday night, adding that the bilateral talks were positive. 

The US official said: “All those talks went well. Everybody was happy for making progress, for better understanding of where we are and what we need to do. That’s encouraging. We should be cautiously optimistic. Our leadership is talking and they see a way forward.” 

In an interview with Fox Business, US Treasury secretary Scott Bessent said: “I think India will slowly reduce oil purchases from Russia. But the perverse thing is that Europe is buying the oil that India refines. They are funding the war against themselves.” 

Goyal’s visit followed a meeting of the chief negotiators of both countries in New Delhi on September 16. Last week, a team of US officials led by US Trade Representative (USTR) for South and Central Asia Brendan Lynch met with an Indian team headed by Agrawal, who is also the special secretary in the commerce department. Both sides agreed to intensify efforts to achieve a “mutually beneficial” trade deal, setting aside recent strains in bilateral relations.

 

Bilateral trade talks had stalled mainly because of India’s refusal to grant the US unhindered market access to its politically sensitive agriculture and dairy sectors. Trump’s decision to impose a 25 per cent reciprocal tariff on India, along with an additional 25 per cent levy for purchasing Russian oil, had previously strained bilateral ties.

 

However, the US official said he did not consider agriculture and dairy issues as significant as the Russian oil purchase issue. “The US has more flexibility on agriculture and dairy than India,” he added.

 

In his first public remarks after the US administration put an additional 25 per cent tariff due to India’s purchase of Russian oil, Prime Minister Narendra Modi last month drew the red line, saying the country “will never compromise on the interests of its farmers, livestock rearers and fisherfolk”.

 

Asked whether India was expected to increase its crude oil purchases from the US, the official said Washington would be happy about that. “I am confident that if India showed interest in more energy purchases from the US, that would be very well received.”

 

Goyal on Wednesday said India aimed to expand trade in energy products with the US over the coming years.

 

On whether India would be asked to commit to a certain level of investment like in other trade deals it had signed so far, the official said it was a “reasonable assumption” but he was not sure. 

Back on track

• Recent trade talks in the US termed ‘encouraging’
• Talks had stalled over India’s refusal to open agriculture and dairy sectors
• But a US official says Russian oil imports are the bigger hurdle
• Commerce Minister Piyush Goyal has said India will expand energy trade with the US in the coming years