U.S.-India trade talks could get a boost as America sees life going on without it

• The U.S. has imposed 50% tariffs on India while maintaining 15% tariffs on EU exports, creating urgency to avoid being left out of major trade partnerships
• Key sticking points in U.S.-India talks include American demands for greater access to India's politically sensitive farm market and pressure to stop buying Russian oil
• India's Russian oil purchases fell to their lowest level in two years in December, potentially easing one negotiation obstacle with the U.S.

Summary

Key Development:

The EU and India signed a landmark trade agreement on Tuesday after two decades of negotiations, phasing out tariffs on the vast majority of bilateral imports. This deal is prompting speculation that it could accelerate stalled U.S.-India trade negotiations.

Main Players:

• India: Secured major trade deal with EU while maintaining 50% U.S. tariffs
• United States: Has existing EU trade deal (with 15% tariffs on EU exports) but faces uncertain progress with India
• European Union: Achieved breakthrough agreement amid global trade tensions

Market Implications:

Analysts suggest the EU-India agreement could "light a fire" under U.S.-India trade talks as Washington observes other nations reducing trade barriers. India's oil and gas minister confirmed negotiations are at an "advanced stage" but provided no timeline. The deal reduces—but doesn't eliminate—pressure on India to conclude a U.S. agreement, as the U.S. remains India's largest trade and defense partner.

Key Obstacles:

Major sticking points for U.S.-India negotiations include:

• U.S. demands for greater access to India's politically sensitive agricultural market
• U.S. pressure on India to stop purchasing cheap Russian oil (though such purchases fell to two-year lows in December)

Strategic Context:

The EU-India deal reflects potential backfiring of Trump's "America First" policy, as nations pursue bilateral agreements independent of U.S. involvement. Markets are "keenly watching" whether India can better withstand U.S. tariffs given improved EU market access, and whether this development will fast-track U.S.-India negotiations.