There has been progress in trade negotiations with the US and talks are still underway, the Indian government said on Thursday amid focus now shifted to the trade discussions with Washington after New Delhi signed a “mother of all” agreement with the European Union (EU) earlier this week.
The India-US trade talks will determine the fate of President Donald Trump's 50 per cent tariffs imposed on Indian imports.
In its annual economic survey presented on Thursday, the government acknowledged that it was currently subjected to a tariff rate of 50 per cent on goods exported to the US. “There has been progress in the negotiations of the trade deal between the two countries,” a part of the Economic Survey 2025-26 read.
It also said that India was actively pursuing a trade strategy which includes “engagements in free-trade agreement (FTA) negotiations with the US, Chile, and Peru”.
Decline in exports to US
TL;DR: The government said that it was planning to strike an agreement with the US to lower the duties after the 25 per cent tariffs first announced by the US in April 2025.
The government said that it was planning to strike an agreement with the US to lower the duties after the 25 per cent tariffs first announced by the US in April 2025.
“So, in August, when the American President announced an additional penal tariff of 25 per cent on most of India's merchandise exports to the United States on top of the reciprocal tariff of 25 per cent announced in April, it surprised many since India was expected to be one of the early winners in the new tariff regime of the United States,” the survey read.
While it noted that the 50 per cent tariffs left an impact, the survey also said that the year-on-year exports to the US from April to November last year saw a significant decline. Likewise, India’s exports to other parts of the world saw a “positive growth”, the document read.
What Trump and his aides claimed
TL;DR: A few days later, US commerce secretary Howard Lutnick claimed that a potential agreement with India fell through once because PM Modi “didn't call” Donald Trump.
Earlier this month, Donald Trump had hinted that the existing tariffs on India could further increase if New Delhi didn't help with the “Russian oil issue", which was central to the Trump administration's doubling of tariffs back in August 2025.
A few days later, US commerce secretary Howard Lutnick claimed that a potential agreement with India fell through once because PM Modi “didn't call” Donald Trump. However, the Indian ministry of external affairs later dismissed Lutnick's claims.
In contrast, the US Ambassador to India, Sergio Gor, assured later that trade negotiations between both countries was still underway.
Most recently, US Treasury Secretary Scott Bessent indicated that the US may cut 25 per cent of the 50 per cent tariffs currently imposed on India. He claimed that refineries in India had significantly reduced the purchase of Russian oil. “The tariffs are still on. I would imagine there is a path to take them off,” Bessent had said.
Trump first imposed 25 per cent tariffs on India in April 2025, which he later doubled in August criticising New Delhi's energy ties with Moscow. The move was seen as a means to put pressure on Russian President Vladimir Putin to end the offensive in Ukraine.
Curated by James Chen
