US-India trade talks have revived as Trump sees other deals in the works

Analysts say a new push for a US-India trade deal could come as the White House sees other countries and power blocs working harder than ever to remove barriers to trade and tariffs.

The urgency and momentum of negotiations on this network may come after the EU and India sign the agreement long-awaited trade agreement Under the deal on Tuesday, the two sides will phase out tariffs on the vast majority of each other’s imports.

“The EU-India deal…could help push for a US-India trade deal and advance negotiations on a comprehensive bilateral trade agreement,” said Mark Linscott, non-resident senior fellow on India at the Atlantic Council. commented on Tuesday.

Trump has yet to respond to the EU-India dealit’s been two decades in the making, but Washington may view bilateral trade deals between other powerful nations with concern and as a potential threat.

The US has a trade deal with the EU (which retains 15% tariffs on goods exported to EU states), but the stalling of US trade talks with India – a country where it has imposed 50% tariffs – leaves those negotiations in uncharted territory.

But according to Atlantic Council expert Linscott, there is no need to break the US-India agreement. “Even if the agreement is interpreted as a response to the Trump administration’s tariffs and tariff threats, there is no reason for it to undermine US trade relations with the EU or India,” he said.

India’s oil and gas minister told CNBC on Tuesday that a US-India trade deal had been reached “very advanced” but he admitted there was no deadline for a deal.

“I’m trying to look on the positive side, I’m not a fortune teller, I don’t know when the trade deals will be signed, how long it will take … but I think somebody (everyone) needs to chill a little bit,” he told CNBC’s Amitoj Singh, as India and the EU announced a landmark trade deal.

“I’ve been told by people involved in it (negotiations) that it’s at a very advanced stage and I hope it will see the light of day sooner rather than later,” he added of the US deal.

The EU and India described their agreement as follows “the mother of all deals” and while global trade is strained by tariffs, sanctions and geopolitical competition, while the deal will see the two countries ally, it will not diminish India’s desire to strike a deal with the US, noted analysts at global risk consultancy Teneo.

The deal would “reduce (though not eliminate) pressure on India to negotiate with the US, which remains its largest trade (in goods and services) and defense partner,” analysts Arpit Chaturvedi and Carsten Nickel said in emailed comments on Tuesday.

Analysts at Citi said on Wednesday that markets will “closely monitor the immediate implications” of the EU-India deal on India-US tariff talks.

“There was now hope that these talks could be speeded up, but it remains to be seen whether Indian authorities will be in a better position to withstand higher US tariffs given their easy access to the EU’s large market.”

Shumita Deveshwar, Chief Economist for India at TS Lombard noted that there are a number of hurdles that prevent an immediate deal.

“After nearly 2 decades of negotiations, a free trade agreement with the EU could not come at a better time for India, which is trying to reach an agreement with the US,” he said in an email. analysis Wednesday.

“Trade talks with the US have been stalled over greater access to India’s agricultural market and India’s insistence on ending purchases of cheap Russian oil… Agriculture is a politically sensitive sector in India, given the low level of farm mechanization and the large number of subsistence farmers. However, India appears to be cutting back on Russian oil purchases in December.