India, US restart talks on trade after tariff tirades

India and the United States will hold trade talks in New Delhi on Tuesday, senior commerce ministry officials said, underlining a reversal in bilateral ties after weeks of criticism from US officials and raising hopes for a breakthrough on a free trade agreement that was jeopardised by the punitive tariffs imposed by US president Donald Trump on India for buying Russian oil.

- Rajeev Jayaswal

"The chief negotiator of the US [Brendan Lynch] is visiting India tonight," India's chief negotiator for the bilateral trade talks and special secretary, commerce, Rajesh Agrawal, said on Monday afternoon. The US team will meet the Indian negotiating team on Tuesday, commerce secretary Sunil Barthwal confirmed, adding that, overall, the two sides are in a "positive frame of mind" on matters related to trade.

Tuesday's meeting may pave the way for the sixth round of trade talks that were earlier scheduled for August 25 in New Delhi. Those talks were postponed after Trump first imposed on India a 25% reciprocal tariff and later a 25% punitive tariff that cumulatively was one of the highest levies on merchandise exports from any US trading partner. The additional levy for purchasing Russian crude oil kicked in on August 27. India has called the tariffs unreasonable and unjustified.

The meeting on Tuesday would be the first, formal, faceto-face bilateral engagement of the two negotiating teams, representing a high-level trade dialogue, after the fifth round in Washington from July 14 to 18.

The two officials described it as a "continuation of talks" as both sides had been "continuously and constructively" engaged through virtual mode despite the hiatus in in-person talks.

The sentiment initially began shifting earlier this month with Trump and Prime Minister Narendra Modi exchanging positive statements, with Trump calling Modi a "great Prime Minister" and both leaders expressing confidence in concluding trade negotiations.

This was followed by commerce secretary Howard Lutnick telling CNBC on Thursday, "I think India, we'll sort it out once they stop buying Russian oil." Sergio Gor, Trump's nominee for US Ambassador to India, told senators at his confirmation hearing the same day that India and the US were "not far apart" on resolving trade and tariff disputes.