"Surprised If No Deal By March": India’s CEA Optimistic on US Trade Pact Despite 50% Tariffs
Amidst a bruising trade war that has seen the US impose steep tariffs on Indian goods, India's Chief Economic Advisor (CEA) V Anantha Nageswaran has struck a note of optimism. Speaking in an interview with Bloomberg on Thursday, Nageswaran asserted that “most India–US trade issues have been sorted out,” predicting that a trade deal could be finalized as early as March 2026.
“I will be surprised if no India–US trade deal [is reached] by March,” Nageswaran said, signaling hope for exporters currently grappling with crippling levies.
Optimism vs. Reality: The Tariff Burden
Nageswaran’s confidence comes at a time when trade ties are under significant strain. Since August 27, the US has imposed a 50% tariff on Indian exports entering its market. This includes a controversial 25% penal duty tied specifically to India’s continued purchase of Russian oil—a sticking point that has frustrated Washington. The CEA had expressed similar optimism in September, hoping for a resolution to the penal tariff "in the next couple of months," a prediction that ultimately came undone.
Sectors Under Siege
The high tariffs have hit labour-intensive sectors the hardest. Exporters of shrimp, textiles, leather, and footwear are reporting a steep fall in shipments, squeezed by the higher levies that make their products less competitive in the American market.
India has consistently termed these unilateral measures as "unjustified," but the Trump administration has maintained its "America First" protectionist stance.
New Threat: Rice Exports in Crosshairs
While officials negotiate in New Delhi, a new front may be opening. Earlier this week, US President Donald Trump dampened hopes of a quick resolution by hinting at potential action against India's rice exports.
According to Anjali Prasad, India's former envoy to the WTO, the US currently sources more than a quarter of its imported rice from India. Any new duties on this staple could disrupt supply chains significantly.
Harsh Pant, Vice President at the Observer Research Foundation (ORF), warned that escalating the tariff war at this stage could derail the fragile negotiations. "Any new duties at this stage could prove counterproductive for the negotiations currently underway," Pant cautioned.
Final Thoughts from The Trending People
The coming months are critical for India-US economic ties. While the CEA’s timeline offers a glimmer of hope, the ground reality of 50% tariffs and the threat of new sanctions on rice suggests that the road to a March deal will be anything but smooth.