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Informist, Friday, Dec. 12, 2025

 

--Govt sources: India commits to buy energy pdts from US under trade deal

--Govt sources: India commits to buy defence equipment from US in trade deal

--Govt source: India commits to buy aviation equipment from US in trade deal

--Govt sources: Haven't offered market access to US' agri pdts in trade deal

--Govt sources: Aim to get punitive duty removed in 1st tranche of US deal

--Govt sources: Aim to get reciprocal duty lowered in 1st tranche of US deal

By Krity Ambey

 

NEW DELHI – India has committed to big-ticket purchases of energy products and defence and aviation equipment from the US under the Bilateral Trade Agreement talks, according to two government officials. This is probably what prompted US Trade Representative Jamieson Greer to call the offer New Delhi's "best offer ever" under the trade deal, one of the officials said. Meanwhile, the other official confirmed that India has not committed to opening the farm sector to any US crop, which may explain why Greer also referred to India as a "tough nut to crack" while speaking at a Senate Appropriations subcommittee hearing in Washington on Tuesday.

 

The second official said New Delhi has drawn a firm red line around the sensitive farm and dairy sectors. "We have not offered them market access for any crop, be it corn, soybean, or cotton," the official said. In fact, the commerce ministry has received instructions from the Prime Minister's Office to not make any offer to the US that might compromise the interests of Indian farmers, fishermen, and cattle farmers, according to the officials.

 

In the first tranche of the trade deal, India aims to get the US to scrap the 25% punitive tariff it has imposed on Indian goods and to secure a lower reciprocal tariff, the first official said. "I do not expect complete removal of the reciprocal tariff. (US President) Trump has not removed it for any nation," the official added. Among countries that have signed trade deals with the US, the extra tariff typically ranges between 10% and 20?ove the most-favoured-nation rate. The UK has secured the best deal so far, with a 10? valorem duty.

 

The key question now is how low India can bring the tariff. "The Indian industry can live with an extra tariff of 15–20%," Federation of Indian Export Organisations Director General Ajay Sahai said. The additional burden will certainly hit exporters' margins, but it will still give India a tariff advantage over its Asian competitors, he added. At the current 50% duty, India is effectively out of the competition. The US has set a 30? valorem duty for China, 20% for Vietnam, and 19% for Indonesia and the Philippines.

 

Although India and the US had aimed to conclude the first tranche of the agreement by fall 2025, it remains unclear whether an announcement will come this month. Deputy US Trade Representative Rick Switzer, who led a delegation to New Delhi for trade negotiations, wrapped up his visit on Thursday after two days of discussions with the Indian team headed by Commerce Secretary Rajesh Agrawal and India's chief negotiator, Darpan Jain, joint secretary in the commerce ministry. Switzer also met Commerce Minister Piyush Goyal and Foreign Secretary Vikram Misri to discuss bilateral ties.

 

This was the second US delegation visit since the White House imposed the 50% tariff on Indian goods in August. Commerce Secretary Agrawal is also expected to lead a team of officials to Washington later this month, according to a person aware of the plan. The delegation is likely to return by Dec. 22–23, the person said.

 

The trajectory of India–US trade negotiations has fluctuated significantly over the past nine months. Talks hit an impasse in August due to disagreements over the farm sector. Negotiations resumed in September, followed by visits from officials on both sides. However, the commerce ministry has repeatedly emphasised that none of these interactions, including the latest visit, constitutes a formal negotiation round. A commerce ministry official said that a formal round follows a specific protocol in which the subjects for discussion are identified and exchanged in advance. The ongoing discussions on the US trade deal have not followed this protocol.

 

Even as Minister Goyal has consistently maintained that India will not negotiate under the pressure of a timeline, exporters are hoping for a timely conclusion to the deal so that tariffs can be reduced. The US was India's top export destination in 2024–25 (Apr–Mar), with shipments worth $86.5 billion. But after the tariff hike in August, India's exports to the US fell 12% in September and 8.6% in October, according to the latest data available.  End

 

US$1 = INR 90.33

 

Edited by Avishek Dutta

 

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