New Delhi: US-India trade talks have suffered a major setback after the United States cancelled a planned delegation visit to New Delhi, heightening fears among businesses and workers about worsening trade relations. The decision, confirmed on 16 August, has left Indian exporters grappling with uncertainty as tariffs loom large.
US-India Trade Talks Derailed by Delegation Cancellation
A US trade delegation, headed by Assistant US Trade Representative Brendan Lynch, was due in New Delhi from 25 to 29 August to advance the sixth round of negotiations on a Bilateral Trade Agreement. The abrupt cancellation, with no rescheduled dates, has stalled US-India trade talks, leaving stakeholders worried about the deepening economic rift.
Trade Disputes Intensify with New US Tariffs
The core issue fuelling the collapse of US-India trade talks is a US-imposed 25 percent tariff on Indian goods, effective from 7 August, with an additional 25 percent levy set for 27 August. The US cites India’s ongoing purchase of Russian crude oil as justification, a move India deems unfair, pointing out that other nations, including the US, maintain similar trade without sanctions.
Delegation Cancellation Hits Indian Exporters Hard
India’s exports to the US, valued at 86.51 billion dollars for the fiscal year ending March 2025, represent a critical economic lifeline. The halt in US-India trade talks threatens industries like textiles, pharmaceuticals, and technology, impacting millions of jobs. Small businesses and workers now face fears of shrinking markets and rising costs.
Trade Talks Stumble as India Defends Economic Priorities
Prime Minister Narendra Modi recently emphasised India’s resolve to protect its farmers and cattle rearers, resisting US pressure to open sectors like agriculture and dairy. This firm stance, central to the ongoing US-India trade talks, reflects the government’s focus on safeguarding domestic livelihoods despite external pressures.
Future of US-India Trade Talks Remains Uncertain
While communication between the two nations continues, the lack of a rescheduled delegation visit dims hopes for a swift resolution. The target of finalising the first phase of the trade agreement by autumn 2025 now seems distant. For Indian communities and US businesses, the breakdown in US-India trade talks underscores the urgent need for renewed dialogue to restore economic stability.
Published in SouthAsianDesk, August 17th, 2025
Follow SouthAsianDesk on X, Instagram, and Facebook for insights on business and current affairs from across South Asia.
