India is hoping that the United States may reduce newly imposed tariffs following “positive” and “forward looking” trade discussions, but analysts say that, regardless of the outcome of the latest talks, repairing the relationship between the two sides will be very difficult as mutual trust has broken.

India’s Chief Economic Adviser V. Anantha Nageswaran said on Sept 18 that the US may ease punitive tariffs on New Delhi soon following ongoing trade negotiations.

“My personal confidence is that in the next couple of months — if not earlier — we will see a resolution to at least to the extra penal tariff of 25 percent,” Nageswaran said during an event in Kolkata, the capital of India’s eastern West Bengal state.

“It may also be the case that the reciprocal tariff of 25 percent may also come down to levels, which we were earlier anticipating, somewhere between 10 percent and 15 percent,” he said.

A day earlier, on Sept 17, India’s Commerce and Industry minister Piyush Goyal also signaled optimism that trade negotiations could yield positive results.

"India and the US are friendly nations, so are our leaders. All issues will be resolved in the times ahead," Goyal said.

Expectations for a breakthrough have also risen as US President Donald Trump called Indian Prime Minister Narendra Modi on Sept 16 to extend birthday greetings. The call, made on the eve of Modi’s 75th birthday, was seen by Indian officials as signaling a potential reconciliation following months of tensions over tariffs.

Trump made the call as a US delegation was in New Delhi to meet with representatives of India's commerce ministry for talks regarding a potential trade agreement.

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Modi, who celebrated his birthday on Sept 17, posted a message on social media platform X thanking Trump for his call and birthday wishes. “Like you, I am also fully committed to taking the India-US Comprehensive and Global Partnership to new heights,” he wrote.

Despite the seeming bonhomie, analysts said it is unlikely that bilateral relations can return to the previous level, given the erosion of trust between the two sides following Trump’s shocking tariffs.  

For decades India and the US had been strengthening ties across multiple domains. Hence, the unilateral imposition of a 50 percent tariff on Indian goods came as both illogical and shocking, said Dalbir Ahlawat, a senior lecturer in security studies at Australia’s Macquarie University.

“It will have long-term implications for bilateral relations,” Ahlawat said, pointing out that partnerships thrive on support and trust, not punitive measures. There is no doubt that Washington’s tariff moves have created a trust deficit in India-US relations, he said.

The US continues to demand that India open up its agricultural sector and dairy market, after imposing 50 percent tariff on Indian goods, which includes a 25 percent punitive levy over India’s purchases of Russian oil.

India is resisting pressure to open up the agricultural and dairy markets as it believes US imports could affect the livelihoods of a large section of Indian population and also pose a threat to national food security, said Dibyendu Maiti, a professor at the Delhi School of Economics and member of an advisory group for India’s Ministry of Statistics and Programme Implementation.

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“India sensibly shielded its agricultural and dairy markets from American access. Had we caved, the harm would have been much worse,” said Biswajit Dhar, a former professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University, New Delhi.

“India must keep its small and marginal farmers in mind, and no trade deal can be one-sided,'' Dhar emphasized.

India’s exports to the US fell for the third straight month in August to $6.7 billion, down 16.3 percent from July, the largest monthly decrease of 2025, according to Ajay Srivastava, founder of Global Trade and Research Initiative, or GTRI, a New Delhi-based think tank.

“September is expected to show an even steeper fall, as it will be the first month fully exposed to the 50 percent rate,” the GTRI warned.

Amid worries about the possible dent to India’s exports sector and the overall economy, observers are keeping a close watch on the ongoing trade discussions with the US.

On Sept 16, the US delegation, led by Brendan Lynch, assistant US trade representative for South and Central Asia, held talks with Indian government officials.

India’s Commerce ministry said in a statement the following day that trade discussions on a bilateral trade agreement were “positive” and that both sides had decided to “intensify efforts” to reach a deal quickly.

As of now, the 50 percent tariff imposed by Trump administration on Indian goods remains in place. Both sides are expected to hold a formal sixth round of trade negotiations.

Upcoming talks will spur hope for a forward-looking deal, said Maiti from the Delhi School of Economics.

The writer is a freelance journalist for China Daily.