MediumIV Macro Policy & Sovereign Debt1 October 2026, Thursday
US says an interim trade deal with India will not come immediately
Commerce Minister Piyush Goyal and US Trade Representative Jamieson Greer discussed the interim deal at the G20 trade ministers' meeting in Milwaukee. Greer said the deal would not come immediately. Under a law that allows tariffs of up to 100% on buyers of Russian oil, the first decision date is 18 October.
According to The Tribune, the meeting took place on 1 October; the Daily Excelsior gives the date as 2 October. Goyal described the talks as productive and had earlier said he considered the deal almost finished. The Tribune reports that the US proposed a reciprocal tariff of 18% on selected Indian goods. The two sides also discussed removing tariffs on generic medicines, diamonds, jewellery and aircraft parts. The framework was announced on 7 February, but nothing had been signed as of 1 October.
The timing matters because of Russian oil. According to IndraStra, Trump signed the Russia and Iran sanctions law on 18 September. The law allows an additional levy of up to 100%, on top of existing tariffs, on goods from the 5 largest buyers of Russian crude or gas. The deadline for the first presidential decision is 18 October. The President can grant a waiver on national interest grounds.
India's purchases of Russian oil are falling but have not stopped. Kpler data cited by ThePrint show the country bought 1.74 million barrels per day of Russian crude in September. That is below August's 2.02 million barrels and the lowest level since April. Total crude imports rose to 5.3 million barrels per day, with Iraq at 575,000 barrels and Saudi Arabia at 566,000 barrels closing the gap.
Talay assessment
Bottom line
If the interim deal is not signed before 18 October, India reaches the first decision date under the sanctions law unprotected. Purchases of Russian oil fell to 1.74 million barrels per day in September, suggesting New Delhi is laying the ground for a waiver. The most likely path is that the deal drags on for a few more weeks but India is kept out of the first tariff wave.
Likely effects
- Indian exportsNegativeWeeks
The gap between the proposed 18% tariff and the risk of an extra levy of up to 100% will make exporters plan orders cautiously throughout October.
- Oil supplyUncertain1–6 months
Higher purchases from Iraq and Saudi Arabia partly replace Russian oil, but these barrels may cost more.
- Oil prices for TürkiyeNegative1–6 months
If India turns more towards Gulf oil, demand for the same barrels rises. That supports costs for Brent-linked importers such as Türkiye.
Possibilities, ranked
- 1Extended talks, waiver55%
The deal is not signed in October, but Washington grants India a waiver or deferral in its 18 October decision.
Watch: The list of target countries in the presidential decision due on 18 October
- 2Interim deal signed25%
Following a Modi–Trump meeting, the interim deal is announced before 18 October and the tariff risk recedes.
Watch: A signing announcement from the White House or the Commerce Ministry
- 3India makes the list20%
India is counted among the 5 largest buyers and an additional tariff is applied to its goods.
Watch: A Federal Register entry setting the extra tariff rate on Indian goods
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Proposed reciprocal tariff▼ 18%
- Possible extra tariff cap▼ 100%
- Russian oil in September▲ 1.74 mn b/d
Sources
- The Tribune — Piyush Goyal, US trade chief Greer hold 'productive discussion' on India-US interim trade deal
- Daily Excelsior — India-US trade deal talks near end, but no immediate agreement: USTR
- IndraStra — New U.S. law revives tariff threat over India's Russian oil
- ThePrint — India now importing pre-conflict levels of Gulf crude; share of Russian oil lowest since April