India and United States are unlikely to sign the proposed interim trade agreement in haste, as both nations continue discussions while awaiting clarity on new tariff policies.
According to Commerce Secretary Rajesh Agrawal, negotiations between the two countries are progressing steadily, but the final agreement will only be signed after the United States finalizes its new global tariff framework.
Reports indicate that there is no deadlock in the talks, and both sides are actively working on finalizing the technical and legal aspects of the agreement.
The delay comes in the wake of a recent ruling by the US Supreme Court, which struck down broad tariffs imposed under provisions used by the Trump administration. This decision has prompted the US to redesign its global tariff regime, impacting ongoing trade negotiations.
Currently, the US has imposed a temporary tariff of around 10% on certain products from multiple countries under the Trade Act of 1974, as it works toward establishing a revised tariff structure. Indian officials have stated that India aims to secure a deal that offers its exporters a competitive advantage in the US market.
Sources suggest that the overall framework of the agreement has been finalized in principle, with only technical details and regulatory aspects left to be completed. India had earlier agreed to reciprocal tariffs of up to 18% on select goods, which could benefit Indian exporters compared to other global competitors. However, these terms may evolve depending on the new US tariff system.
Officials also clarified that India’s position differs from that of Malaysia, which had a legally binding trade agreement with the US that was later withdrawn due to changing tariff policies. In India’s case, only a framework exists so far, giving both flexibility and time before final commitments.
Beyond tariffs, discussions also cover non-tariff barriers and sector-specific duties. Rajesh Agrawal emphasized that India remains in continuous engagement with the US to finalize a mutually beneficial trade agreement, with talks moving in a positive direction.
