RBI Governor Sanjay Malhotra warned at the post‑monetary‑policy conference that a lack of a definitive India‑US trade deal could expose India to higher U.S. tariffs, potentially denting exports.
He cautioned that the exact blow would hinge on tariff levels, noting that “it’s premature to answer” but that a negative impact was inevitable if the U.S. pushed through its proposed duties.
Malhotra highlighted India’s portfolio of recent and pending trade agreements, explaining that diversification of export markets would offset a tariff shock in certain sectors. He also referenced Finance Minister Nirmala Sitharaman’s statement that talks have reached a plateau, implying stalled progress.
U.S. Trade Representative Jaime Greer said the U.S. still has “sticking points” to iron out, while the trade deficit with India hovered around $34 billion last year, a figure the U.S. hopes to narrow. Both sides are expected to revisit the tariff framework in the coming weeks, with a potential agreement contingent on clearer U.S. tariff designs.