Due to ongoing disagreements over the trade agreement, Washington is seeking to strengthen ties with its strategic partner despite months of tension. US Secretary of State Marco Rubio is preparing for his second visit to India this year.
During the upcoming trip, Rubio will meet with high-ranking Indian officials, but he intends to bypass India's capital. Instead, he will focus on energy and investment issues during visits to the financial hub of Mumbai and the oil hub of Jamnagar, where billionaire Mukesh Ambani's world's largest refinery is located.
Experts note that the main problem remains the inability of both countries to conclude the long-awaited trade deal. Various factors have contributed to this obstacle, including President Donald Trump's tariff campaign, disputes over energy imports, and warmer relations between Washington and India's arch-rival, Pakistan.
According to a statement from the US Department of State, Rubio's six-day overseas trip will begin on Saturday with a visit to Uzbekistan before arriving in India.
India and the United States reached an agreement in February regarding a framework for a temporary agreement. Under this plan, Washington agreed to reduce mutual tariffs from 25% to 18%, while India was supposed to reduce duties on a range of industrial and agricultural goods.
Despite lengthy negotiations, the agreement has not yet been finalized and signed. One reason is the legal uncertainty related to Trump's tariff plans after court proceedings undermined the basis of mutual tariffs.
Trade expert Ajay Srivastava noted that 'the February framework proposed reducing India's mutual tariff... in exchange for significant concessions from India. Once this tariff regime was revoked, the value of the US offer became unclear.'
India is also cautious about new measures from Washington that might affect it. These include investigations into alleged unfair practices in several countries and a new law allowing tariffs of up to 100% on countries purchasing Russian oil. However, Trump signed an executive order on Friday canceling the threatened sanctions.
Progress has encountered several obstacles. For most of this year, both sides were optimistic about the possibility of concluding the temporary agreement. In June, US Ambassador to India Sergio Gor stated that negotiators were working on the 'last percentage' of the pact.
However, the tone has recently become noticeably more cautious. Indian Finance Minister Nirmala Sitharaman reported last week that negotiations had reached a 'plateau,' and there was little room for further concessions. Her comments came several days after US Chamber of Commerce representative Jameson Green stated that the announcement was 'not close.'
Agriculture remains a sensitive area for India, which does not want to expose farmers to greater foreign competitive pressure. Meanwhile, Washington insists that India increase its purchases of energy supplies from the US.
New Delhi has also insisted that its final tariff rate be competitive compared to what other regional manufacturing competitors, such as Vietnam, receive. Indian Commerce Minister Piyush Goyal stated this week that the first phase of the deal is in its final stages but added that it would not come into effect until India secured an advantage over its competitors.
He emphasized: 'It is going through the final contours, legal formalization, and we hope to complete it and implement it soon, as soon as we gain a competitive advantage over our rival countries.'
Exports to the US rose by 21% in August, reaching $8.3 billion compared to the same month last year when India faced 50% tariffs. This export surge was a positive development for the Indian economy, which is experiencing turmoil due to high energy prices caused by the Middle East war. Economists warn that the return of higher tariffs will cloud India's growth forecast, damage market sentiment, and increase pressure on the already weak rupee.