How US govt shutdown is slowing India-US bilateral trade negotiations

Commerce Secretary Rajesh Agrawal will join the Indian delegation in the United States on Friday for trade talks amid New Delhi signalling its willingness to step up energy imports from America.

In the past 7-8 years, India’s energy purchases from the US, largely crude oil, have come down from USD 25 billion to around USD 12-13 billion.

“So, there is a headroom of around USD 12-15 billion which we can purchase without worrying about the configuration of refineries,” Agrawal told reporters on Wednesday.

He said India has conveyed to the US that it is keen to diversify its energy import portfolio, calling it “the best strategy for a big buyer like India.”

The top official’s remarks come at a time when higher energy imports from the US could help address Washington’s concerns over its merchandise trade deficit with India, which stood at USD 45.8 billion in 2024-25.

“As a country, we will be very happy to buy more energy from the US, subject to availability at the right price,” Agrawal said.

US President Donald Trump on Wednesday said Prime Minister Narendra Modi had assured him that India would stop buying oil from Russia, calling it a “big step” toward tightening global pressure on Moscow over its invasion of Ukraine.

Speaking at the Oval Office, Trump said the US was “not happy” that India continued purchasing Russian crude, which he argued was helping finance President Vladimir Putin’s war effort.

“He (Modi) is a friend of mine, we have a great relationship... we were not happy with him buying oil from Russia because that let Russia continue on with this ridiculous war where they’ve lost a million and a half people,” Trump said.

“I was not happy that India was buying oil, and (Modi) assured me today that they will not be buying oil from Russia. That’s a big step. Now we’ve got to get China to do the same thing,” he added.

India is currently the world’s second-largest buyer of Russian fossil fuels after China, according to the Centre for Research on Energy and Clean Air (CREA).

Talks under shadow of US govt shutdown

The Indian negotiating team is already in Washington, and Agrawal will join them on Friday. “Our team is trying to see if we can have a win-win solution between the two sides, which can address some of these tariff issues,” he added.

Asked if the current discussions amount to a formal round of negotiations, the commerce secretary said the US government shutdown had limited official participation.

"So, that's not the right time to have a full-fledged negotiation. Having said that, there is a movement on both sides where we are trying to see if there is a pathway to address the current trade challenges. Both sides are discussing to see if there are any answers," he added.

In February, Modia and Trump had directed officials to work on a proposed Bilateral Trade Agreement (BTA) and set a target to conclude the first tranche of the pact by October–November of 2025. So far, five rounds of negotiations have been completed.

Last month, Commerce and Industry Minister Piyush Goyal led an official delegation to New York for trade talks.

The deliberations come amid heightened strain in bilateral relations following the Trump administration’s imposition of steep 50% tariffs on Indian goods, including a 25% additional import duty linked to India’s purchases of Russian crude oil. New Delhi has described these duties as “unfair, unjustified and unreasonable.”