NEW YORK, October 8. /TASS/. US efforts to persuade India to stop purchasing Russian oil and to secure market access for American agricultural products remain the main obstacle to signing a trade agreement between the two nations, according to a report by BMI, a unit of the Fitch international rating agency.
"We expect India and the US eventually to conclude a narrow interim trade deal, although the remaining differences make a near-term breakthrough unlikely," the agency said.
The conflict in the Middle East and difficulties in transporting oil from Persian Gulf nations have reinforced India's incentive to maintain alternative sources of energy supplies, the agency noted.
Despite a narrowing of differences between India and the US, purchasing oil from Russia and importing US agricultural products remain the most politically and commercially sensitive matters for New Delhi. Russian oil accounted for approximately 50.8% of India's oil imports in July 2026. India might potentially allow limited imports of US agricultural goods, but importing American dairy products and genetically modified crops would entail significantly higher political costs.
India's effective tariff rate on US goods currently stands at 13.6%, well below the approximately 35% rate set in February. This implies that the direct benefits of the agreement could be limited unless a deal with the US secures preferential access for Indian goods to commercially significant sectors of the American market.
"India will resist costly concessions unless the US offers it a clear advantage over competing exporters," BMI said.
Trade negotiations between India and the US have also become more complicated due to Washington's efforts to reduce the bilateral goods trade deficit, which stood at $58.42 billion in 2025. India could narrow this gap by increasing purchases of US aircraft, energy products, technology, and weaponry. However, such purchases would not resolve US concerns regarding access to the Indian market.