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On January 13, 2026, the United States and India resumed negotiations to establish a new trade relationship between the two countries under the leadership of newly appointed U.S. Ambassador Sergio Gor. The goal of the negotiations is to increase total U.S.-India trade from approximately $190 billion as of today to $500 billion by 2030. To achieve this goal, negotiations will be conducted through two separate processes: a process focused on tariffs and a process for creating a comprehensive bilateral trade agreement. Together, these two processes represent U.S.-India trade flows during the 2024-2025 fiscal years of approximately $131.84 billion and increasing economic interdependence between the two countries.
The high level of US tariffs on Indian imports, which have been close to 50% since August of 2025 (including tariffs created due to the U.S.'s decision to impose a 25% tariff on products sold to India because of the purchases of Russian oil) has created the biggest dispute between the two countries. The United States has been requesting that India lower its tariffs on corn, dairy products, and nuts while India is defending its farmers and demanding that the United States allow for reciprocal access for India's textiles and engineering products. Also, non-tariff barriers, intellectual property enforcement, and data transfer rules will make it more difficult for both countries to agree on the tariffs and to develop a legally binding agreement.
The ongoing negotiations are occurring within the framework of the United States' strategy of creating the "Pax Silica" initiative to decrease U.S. dependence on China for semiconductor and critical mineral products. On January 13, U.S. Secretary of State Rex Tillerson and Indian External Affairs Minister Sushma Swaraj discussed trade and rare earth mineral products, as well as U.S.-India nuclear and defence cooperation. Furthermore, the strong personal and political ties between former U.S. President Donald Trump and Indian Prime Minister Narendra Modi will be utilized as a potential way to resolve trade disputes and develop a deeper and more economically and strategically aligned U.S.-India partnership.
