US-India trade talks reorganize as Trump sees more deals being made

A new push for a U.S.-India trade deal could be on the way, analysts say, as the White House sees other countries and power blocs working harder than ever to eliminate trade barriers and tariffs.

The urgency and impetus to move the negotiations forward could come after the EU and India sign a deal. long-awaited trade deal Tuesday, with the agreement providing for the two sides to gradually eliminate customs duties on the vast majority of their respective imports.

“The EU-India deal could… light a fire in efforts to secure a U.S.-India trade deal and help advance negotiations on a comprehensive bilateral trade deal,” said Mark Linscott, senior non-resident fellow on India at the Atlantic Council. commented on Tuesday.

Trump has yet to react to the EU-India dealthat lasted two decades, but Washington could view bilateral trade agreements between other powerful nations with concern and as a potential threat.

The US already has a trade deal with the EU (which has maintained 15% tariffs on EU exports to the US), but when it comes to the stalled trade negotiations between the US and India – a country on which it has imposed 50% tariffs – this certainly leaves the negotiations in more uncertain territory.

But according to Linscott, the Atlantic Council expert, there is no need for the U.S.-India deal to be derailed. “While the agreement could be interpreted as a response to the Trump administration’s tariffs and tariff threats, there is no reason for it to harm U.S. trade relations with the EU or India,” he said.

India’s oil and gas minister told CNBC on Tuesday that a U.S.-India trade deal is in the works. a “very advanced stage” but acknowledged he had no timetable for reaching a deal.

“I would try to look at the positive side. I’m not a guesser, I don’t know when the trade deals will be signed, how long it will take… but I think a [everybody] You have to relax a little bit,” he told CNBC’s Amitoj Singh, as India and the EU announced a historic trade deal.

“The people there tell me [the negotiations] that it is at a very advanced stage, and I hope that, as soon as possible, it will also see the light of day,” he added of the American agreement.

The EU and India described their agreement as the “mother of all transactions” And while the deal sees the two countries joining forces at a time when global trade is strained by tariffs, sanctions and geopolitical rivalry, it does not diminish India’s desire for a deal with the United States, noted analysts at global risk consultancy Teneo.

The deal “reduces (but does not eliminate) pressure on India to strike a deal with the United States, which remains its largest trading (in goods and services) and defense partner,” analysts Arpit Chaturvedi and Carsten Nickel said in emailed comments Tuesday.

Citi analysts said on Wednesday that markets would “carefully watch the immediate implications” of the EU-India deal on tariff negotiations between India and the United States.

“There is reason to hope that these negotiations could be accelerated now, although it remains to be seen whether Indian authorities will be in a better position to resist higher US tariffs given easier access to the vast EU market.”

Shumita Deveshwar, chief India economist at TS Lombard, noted that there were a number of sticking points preventing an immediate deal.

“A free trade agreement with the EU, after almost two decades of negotiations, could not come at a better time for India, which is struggling to reach an agreement with the United States,” she said in an email. analysis Wednesday.

“Trade negotiations with the United States are stalled due to its insistence on gaining greater access to the Indian agricultural market and that India stop buying cheap Russian oil…Agriculture is a very politically sensitive sector in India given the low level of agricultural mechanization and the large number of subsistence farmers. However, India appears to be reducing its purchases of Russian oil,” she said, noting that such purchases had fallen to their lowest level in two years in December.