Key facts
- India seeks tariff advantage over rival economies for the trade deal.
- The original deal was based on a 50% tariff regime on Indian goods.
- Recent legal changes in the US have introduced complexities to the negotiations.
India and the United States are close to finalizing the first phase of a trade agreement, with India's Commerce Minister Piyush Goyal stating that New Delhi will only proceed if it secures a tariff advantage over rival economies. Goyal indicated that the proposed agreement was "very close" but stressed that India would not compromise on its economic interests. The original deal was centered around a competitive advantage India gained with an 18% tariff rate, down from 50%, which was attractive for India. However, recent legal developments in the US have introduced fresh complexities, prompting both sides to revisit aspects of the arrangement. India is seeking guarantees that its exports will retain a tariff advantage over countries with similar manufacturing capabilities and cost structures, such as Vietnam, Thailand, and China. The agreement can only be implemented once Washington establishes a legal framework that preserves India's competitive edge. US President Donald Trump had previously stated that the two nations were "very close" to concluding the agreement. India's exports to the US were valued at $87.3 billion in 2025-26, while imports stood at $52.9 billion.