New Delhi’s recent free trade agreement with the European Union has emerged as a pivotal factor in accelerating the India-US trade negotiations, according to a leading South Asia expert. Farwa Ameer, Director of South Asia Initiatives at the Asia Society Policy Institute, highlighted how this EU deal has intensified pressure on Washington to finalize its own pact with India.
Speaking on Monday, Ameer noted that while India-US trade talks were already underway, the timing of the EU agreement acted as a catalyst. ‘The EU FTA came at a critical juncture, pushing the US to expedite its process,’ she explained. This development follows Prime Minister Narendra Modi’s announcement alongside US President Donald Trump of a breakthrough trade deal.
Under the agreement, the US will slash tariffs on Indian exports from 25% to 18%, providing a significant boost to bilateral trade. The White House also confirmed the removal of a 25% punitive tariff previously imposed on India over its oil purchases from Russia. After nearly a year of intense negotiations marked by several hurdles, the deal was sealed during a phone conversation between the two leaders.
Ameer emphasized that India’s ties with Russia remain a delicate issue. ‘Even as India diversifies its oil imports, it seeks to maintain stable relations with Moscow,’ she said. The top-level dialogue between Modi and Trump proved instrumental in overcoming sticking points.
Trade expert Wendy Cutler, Senior Vice President at ASPI and former Acting US Trade Representative, pointed out competitive advantages for India. ‘Indian products will face 18% duties in the US, lower than the 19-20% on ASEAN goods, giving exporters an edge,’ Cutler observed. She suggested the US might have secured a better deal than the EU, with India committing to reduce tariffs and non-tariff barriers—though Trump’s statements on this remain somewhat ambiguous.
Trump’s social media post asserted that India would move toward zero tariffs and barriers against the US. Overall, Cutler described the pact as opening doors for collaboration on critical minerals, technology, and supply chain resilience—vital areas for both economies.
Meanwhile, External Affairs Minister S. Jaishankar has departed for the US to attend a ministerial meeting on critical minerals, signaling ongoing momentum in bilateral ties.