US trade team lands in Delhi as tariff clash puts exporters on edge

For the first time since the collapse of high-stakes negotiations over a trade pact, a US trade delegation has arrived in New Delhi to hold talks with Indian officials. The visit comes against the backdrop of President Donald Trump’s steep 50% tariff on Indian imports — a move that has triggered cancellations of export orders and heightened anxiety among Indian businesses.

Led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, the American team was set to meet India’s commerce ministry negotiators on September 16, with both sides signalling cautious optimism but little clarity on whether the talks could unlock a breakthrough.

“This is not a formal round of negotiations, but we will assess the road ahead,” India’s Special Secretary for Commerce Rajesh Agarwal said. Commerce Secretary Sunil Barthwal added that discussions had been ongoing “at diplomatic, trade and ministerial levels” and that “both countries are in a positive frame of mind.”

Tariff pain hits Indian exporters

The visit comes at a tense moment. Indian exporters, particularly in sectors ranging from textiles to engineering goods, have begun to lose ground as US buyers cancel orders citing prohibitive tariffs. Government officials are weighing a relief package to ease liquidity stress, but internal disagreements remain over its scale and design.

Exporters have already appealed to Finance Minister Nirmala Sitharaman and RBI Governor Sanjay Malhotra for support — including a weaker rupee, easier loan terms, and credit to diversify into new markets. “Delays in sealing a trade deal could mean permanent loss of market share in the US,” exporters warned.

Washington signals, but sends mixed messages

While President Trump last week sounded upbeat, saying India and the US were “continuing negotiations” and that he foresaw “no difficulty” in striking a deal, Washington has simultaneously ramped up pressure on G7 nations to penalize countries buying Russian oil — a direct signal to New Delhi.

Prime Minister Narendra Modi responded by calling the two nations “natural partners” committed to a prosperous future, but also drew a firm red line: India will continue purchasing Russian crude, which accounts for nearly 88% of its oil needs.

Agriculture off-limits for India

New Delhi has also rebuffed US demands to open its farm sector to American genetically modified products. Modi, in his Independence Day speech, vowed to protect farmers, fisherfolk, and cattle keepers from “any adverse policy,” underscoring India’s resolve to keep agriculture outside the scope of trade concessions.

As the negotiators gather in Delhi, the talks are less about sealing a deal and more about testing whether the world’s two largest democracies can bridge deep divides over oil, tariffs, and agriculture — before exporters’ fears of losing the American market become irreversible.