US Scraps India Trade Talks: Pressure Tactic or Breakdown in Ties?

The abrupt cancellation of a planned visit by US trade negotiators to New Delhi from August 25–29 has raised fresh doubts over the fate of a proposed bilateral trade agreement, NDTV Profit reported on Saturday, citing people familiar with the matter.

The talks, now likely to be postponed, were seen as a last-ditch attempt to ease trade frictions before Washington’s new tariffs on Indian goods take effect on August 27. With the delay, expectations of any immediate relief appear to have faded.

Earlier this month, U.S. President Donald Trump imposed an additional 25% duty on Indian exports, citing New Delhi’s continued purchases of Russian oil. Once implemented, the new tariff could push duties on some Indian products to as high as 50%—one of the steepest rates applied to any U.S. trading partner.

The collapse of five earlier negotiation rounds had already signaled difficulties, particularly over Washington’s insistence on access to India’s farm and dairy markets and its demand for a halt to Russian oil imports. The latest setback could suggest that neither side is ready to compromise in the near term.

Diplomatic observers believe the cancellation may point to hardening positions in Washington, where pressure has been mounting on India to align more closely with U.S. sanctions on Russia. Others speculate New Delhi could now seek to diversify its trade partners more aggressively, leaning further toward Europe or Asian markets to offset U.S. pressure.

India’s Ministry of External Affairs has argued it is being unfairly targeted for oil purchases from Russia, noting that the U.S. and the European Union continue to trade with Moscow in other sectors. The timing of the canceled visit, just days before the tariff deadline, has fueled speculation that the U.S. may be using trade pressure as leverage on India’s foreign policy choices.

Reuters said it could not immediately verify the NDTV Profit report.

Also Read: Trump-Putin Alaska Summit Ends Without Breakthrough on Ukraine