India, US likely to resolve tariff dispute in 'next couple of months': CEA

A resolution to the ongoing tariff dispute between India and the United States could come within the next couple of months, Chief Economic Advisor V. Anantha Nageswaran said on Thursday, expressing cautious optimism about the trajectory of negotiations.

Speaking at an event in Kolkata, Nageswaran clarified that he had no "inside information" but added, "my personal confidence is that in the next couple of months, if not earlier, we will see resolution at least to the extra penal tariff of 25%. Underneath the surface, conversations are going on between the two governments."

The US had imposed a 50% tariff on Indian exports entering American markets from August 27—of which 25% was a penalty linked to India's continued purchases of Russian oil. The move has hit labour-intensive sectors such as shrimp, textiles, leather, and footwear, prompting exporters to warn of a sharp decline in shipments.

According to Nageswaran, if the tariffs persist through the financial year, India's exports to the US could fall by about 30% compared to last year. "If the tariffs go away, there will be a catch-up effect which may even take exports higher than last year’s numbers," he said.

The tariff issue has added strain to India-US trade ties, already frayed since the Trump administration’s decision to unilaterally impose duties on Indian goods. India has consistently termed the measures "unjustified."

Negotiators from both sides have been engaged in discussions to hammer out a bilateral trade agreement (BTA) since March. Five rounds of talks have been completed, though the sixth round—slated for late August—was cancelled. Earlier this week, chief negotiators Brendan Lynch, Assistant US Trade Representative for South and Central Asia, and Rajesh Agrawal, India's Special Secretary in the Commerce Department, resumed discussions in New Delhi.

US President Donald Trump, who has taken a hard line on India's oil imports from Russia, admitted last week that the tariffs were "not an easy thing to do" and had caused "a rift" between Washington and New Delhi.

Despite the frictions, Nageswaran's remarks signal optimism in New Delhi that a compromise may be within sight.