NEW DELHI - The United States and India are currently engaged in discussions regarding a bilateral trade agreement aimed at deepening their economic and strategic partnership. This declaration came from Sergio Gor, the U.S. ambassador-designate to New Delhi, during a statement made on Monday. The trade talks are anticipated to culminate by the fall of 2025, although progress has been hindered primarily by disagreements over India's continuing purchases of Russian oil.
Since Russia's full-scale invasion of Ukraine in February 2022, India has positioned itself as the second-largest buyer of Russian crude oil, trailing only China. This situation has been a point of contention with the previous Trump administration, which criticized India's procurement of Russian crude as a means of aiding Moscow's military efforts. In August, former President Donald Trump signed an executive order imposing an additional 25% tariff on India for its Russian oil purchases, resulting in a total U.S. tariff of 50% on these imports.
Sergio Gor, who also serves as the U.S. special envoy to South and Central Asia, emphasized the complexities of the U.S.-India relationship, stating, "Real friends can disagree, but always resolve their differences in the end." He acknowledged the challenge of finalizing the trade agreement, particularly given India's status as the world's largest democracy and its diverse economic landscape. On his first day at the U.S. Embassy in New Delhi, Gor indicated that the next scheduled discussion on trade matters would take place on Tuesday.
Furthermore, Gor announced that India would be formally invited to participate in a U.S.-led strategic initiative known as Pax Silica. This initiative aims to establish a secure silicon supply chain spanning critical minerals, energy inputs, advanced manufacturing, semiconductors, and artificial intelligence. Other countries that joined Pax Silica recently include Japan, South Korea, the United Kingdom, and Israel.
The U.S. government's focus on bolstering trade relations with India reflects a renewed effort to solidify partnerships, especially in light of Washington's increasing pressure on New Delhi to halt its imports of discounted Russian crude oil. While trade is a crucial component of the U.S.-India relationship, Gor reiterated that both countries would continue collaborating in various sectors, including security, counter-terrorism, energy, technology, education, and health.
In response to the steep U.S. tariffs, India has accelerated its efforts to conclude several free trade agreements. Recently, India signed a trade agreement with Oman and completed negotiations with New Zealand. These moves are indicative of India's strategy to diversify its trade partnerships while navigating the complexities of its relationship with the United States.
