Rubio: US and India 'very close' to trade deal

The US and India are 'very close' to finalising a trade deal, US Secretary of State Marco Rubio told reporters in Registan Square, Samarkand, Uzbekistan — a signal that months of stop-start negotiations between Washington and New Delhi may finally land.

Rubio meets India's External Affairs Minister S. Jaishankar tomorrow, 20 October, in Mumbai, according to India's Ministry of External Affairs. The session will review the full bilateral relationship after extended talks between the two governments.

For freight, the stakes sit on a few concrete lanes. India is one of the largest suppliers of pharmaceuticals to the US, with pharma shipments across the Pacific valued at over US$15 billion in 2025, according to UN COMTRADE figures. Electronics and textiles ride the same corridors. A signed deal is expected to lower tariff risk and support air exports and imports between the two countries in all three commodity groups.

What does this change for shippers?

Right now, the threat is the tariff schedule itself. In February, Washington reportedly proposed cutting tariffs on Indian products from 25 percent to 18 percent, and removing the additional 25 percent penalty imposed over India's purchases of Russian crude oil. The ask in return was steep: a commitment from India to buy US$500 billion worth of US goods over five years, and an end to Russian oil purchases.

So shippers on the transpacific pharma and electronics lanes are watching two numbers — 25 and 18. A drop of seven percentage points on Indian imports would reshape landed costs for generics, devices and apparel moving by air into US gateways. Forwarders who spent 2025 building contingency routings around tariff risk would get some of that certainty back.

But the oil question has just got more complicated.

Russian oil looms over Mumbai

Talks in Mumbai are likely to include advanced discussions on energy supply and fuel sourcing, given the passage of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 and India's continued consumption of Russian fuel. India hasn't agreed to stop buying Russian crude, and that was the string attached to the tariff relief on the table in February.

Then, last Friday, the White House shifted direction. President Trump signed an executive order waiving the sanctions approved under the Graham Act, and there is no set date for the waiver to end. That changes the negotiating geometry in Mumbai, because one of Washington's principal levers over Indian energy policy has just been relaxed.

Rubio explained the reasoning in Samarkand.

'We've had to waive sanctions over the past few months because of the impact on global supplies and prices,' he said, adding that geography mattered when countries sought alternative energy sources. 'For some countries, it's very difficult to acquire energy from alternative sources. That's not an excuse, but all of that has to be balanced when making foreign policy.'

The mechanism, briefly

Strip it down and the deal looks like this: India buys US goods, cuts Russian crude, and gets tariff relief in exchange. The executive order waiver softens the enforcement stick on the crude side, which cuts both ways — it eases pressure on India, but it also removes a reason for New Delhi to concede quickly.

What that means commercially: the 18 percent tariff offer from February is the anchor point shippers should watch. If Mumbai produces agreement close to those terms, tariff risk on the US$15 billion-plus pharma flow eases, and air cargo demand on the India–US lane gets a cleaner baseline for 2026 contracting. If energy terms stall the signing, the corridor stays exposed to the 25 percent baseline plus the Russia-related surcharge.

Timeline

• Samarkand, 19 October: Rubio declares the two sides 'very close' during his Central Asia tour.
• Mumbai, 20 October: Rubio and Jaishankar hold talks reviewing the bilateral relationship.
• Background: February proposal — tariffs cut from 25 to 18 percent, 25 percent Russian-oil penalty removed, India commits to US$500 billion in US purchases over five years.
• Last Friday: Trump executive order waives Graham Act sanctions; no end date set.

No signing date has been announced. But with both ministers in the same room on 20 October, and tariff numbers already on paper from February, shippers on the India–US air corridors should expect rate and capacity planning scenarios — signed or stalled — to crystallise within weeks.