The interim trade agreement being negotiated between India and the United States will be signed only after the US finalises a new global tariff framework, the Indian government said on Monday. Officials indicated that both countries are currently waiting for greater clarity regarding Washington’s evolving tariff policy before formally concluding the agreement.
Commerce Secretary Rajesh Agrawal said that discussions between India and the US are still ongoing and that both sides are currently working through the finer details of the proposed pact. He explained that the agreement will be formally signed once the new tariff structure being developed by the United States is finalised. According to Agrawal, negotiations remain active and technical discussions are continuing between officials from both countries.
The framework for the interim trade pact had been finalised last month, and the agreement was initially expected to be signed in March. However, recent developments in US trade policy have delayed the timeline for its formal signing. Earlier, sweeping tariffs imposed by US President Donald Trump on several countries, including India, were struck down by the US Supreme Court. The ruling effectively dismantled the earlier tariff structure that had been in place.
Following the court’s decision, the US administration introduced a temporary tariff of around 10 percent on imports from all countries. This measure was implemented under Article 122 of the US Constitution, with the government citing balance-of-payments concerns as the reason for the move. Officials have indicated that these temporary duties are expected to remain in force for approximately five months while a broader tariff framework is being developed.
Because of the changes in the US tariff regime, a scheduled meeting between the chief negotiators of India and the United States has been postponed. The meeting had originally been planned to finalise the legal text of the trade agreement, but officials said it was delayed to allow both sides to reassess the situation in light of the evolving tariff policies.
One of the key objectives of the proposed agreement is to secure better market access for Indian goods in the United States. When the framework for the first phase of the deal was announced, the proposed tariff rate for Indian exports entering the US market was expected to be around 18 percent. This represented a significant reduction from earlier tariff levels of approximately 50 percent.
Officials said that if this tariff level were implemented, it could provide Indian exporters with a competitive advantage compared with other countries that also export goods to the US market. Nations such as China, Vietnam, and Thailand are among India’s major competitors in several export sectors, and the proposed tariff arrangement could improve India’s position in the American market.
However, the final tariff rates under the agreement may still change depending on how the United States ultimately redesigns its global tariff architecture. Officials noted that if other countries face higher tariff rates — such as 19, 20, or 21 percent — India’s proposed rate of 18 percent would still give it a comparative advantage. On the other hand, if tariffs for competing countries are reduced, the tariff level for India may also need to be revised accordingly.
According to government officials, the broad structure of the trade agreement has already been agreed upon, and negotiations are now focused on resolving several technical issues. These discussions include matters related to non-tariff barriers as well as certain provisions linked to Section 232 tariffs imposed by the United States.
Agrawal said that both sides are using the current period productively to address these remaining issues so that the agreement can be signed without delays once the tariff framework becomes clear. He explained that resolving these technical matters in advance would help ensure a smoother process when the time comes to finalise the pact.
Separately, the United States Trade Representative has launched investigations under Section 301 of the US Trade Act involving multiple economies, including India and China. One of these investigations, initiated on March 12, is examining whether certain policies related to enforcing bans on goods produced using forced labour are unreasonable or discriminatory and whether they restrict US commerce. Another probe, announced on March 11, is focused on the industrial policies and trade practices of 16 economies, among them India and China.
Officials in India’s commerce ministry said they are currently reviewing the legal implications of these investigations. However, they noted that such probes generally take considerable time to conclude. An official also indicated that once a trade agreement between India and the United States is finalised and signed, it could potentially help address many of the concerns raised in these investigations. The government maintained that there is no deadlock in negotiations and that discussions between the two countries are continuing on track.
