“The US has assured India of a comparative tariff advantage over its competitors in the trade deal. We will have to see how the tariff framework unfolds,” a senior government official said.
India and the United States are nearing the final stretch of their bilateral trade negotiations as both governments work to conclude the first tranche of the agreement by the end of the current financial year according to official sources.
The interim trade deal framework was originally announced in a joint statement on February 7, 2026, focusing solely on the trade in goods, with services-related issues slated for a second tranche. The proposed agreement is expected to be structured as a legal text accompanied by annexures, featuring a dedicated chapter on customs and trade facilitation.
Securing Competitive Edges Through Section 301 Investigations
The proposed trade pact hinges on securing a competitive edge for Indian merchandise over rival manufacturing hubs such as Vietnam and Bangladesh. Government sources confirmed that Washington provided the assurance once the outcomes of investigations under Section 301 of the Trade Act of 1974 are completed. The United States previously launched two investigations under the legislation in March, addressing forced labour-related production chains and structural excess capacity.
Under the first Section 301 investigation into trading partners failing to effectively enforce bans on goods produced using forced labour, an additional 10 per cent tariff was placed on Indian goods, putting India in a lower-tariff category compared to several other economies that faced a 12.5 per cent levy.
“For us, the key is that we want a trade deal which is beneficial, is balanced and which would give us a comparative advantage over groups of comparable economies,” External Affairs Minister S Jaishankar said at the Hindustan Times Leadership Summit.
Jaishankar said that the bulk of the pending issues are “not so much at our end, because the changes have been more on the American side than ours.” Commerce Secretary Rajesh Agrawal confirmed that a small US team visited India in the first week of November to finalize customs and trade facilitation chapters.
Specifically, a two-member trade track team from the US visited New Delhi on November 2 and 3 for discussions with their Indian counterparts to take forward the technical part of the negotiations.
Commerce and Industry Minister Piyush Goyal stated on Thursday that New Delhi had secured a “very good deal” and would end up with “one of the best deals with the U.S.”, adding that negotiators have concluded most discussions and are fine-tuning the agreement.
Negotiators have also agreed to a specific clause ensuring that if either country changes its tariffs on the other, the second country retains the right to modify its commitments under the deal.
While such a clause is considered unusual in Indian trade pacts, it was explicitly included following the February joint statement. However, finalization has faced delays following the US Supreme Court striking down tariffs imposed by the US administration, prompting the Trump administration to utilize alternative executive provisions such as Sections 301 and 232.
Indian Merchandise Exports to the US Rise to $59.52 Billion
Bilateral economic ties continue to show resilience despite evolving tariff barriers. Indian merchandise exports to the US grew to $59.52 billion in the first seven months of the fiscal year, rising from $52 billion during the corresponding period in the previous fiscal year.
Nisha Biswal described the negotiations as complex, noting that both nations must resolve tricky issues. Biswal also said that Washington took notice when Prime Minister Narendra Modi met with Chinese President Xi Jinping and Russian President Vladimir Putin on the sidelines of the Shanghai Cooperation Organisation meeting, as well as when India signed its trade agreement with the European Union.
Samir Saran, President of the Observer Research Foundation, observed that foreign policy and core trade objectives remain driven by persistent national interests despite domestic electoral shifts such as the Democratic Party’s victories in the midterm elections.
Negotiators Aim to Conclude Phase One by the G20 Summit
Negotiators are aiming to wrap up the first phase of the agreement in time for the G20 leaders’ summit next month, where Prime Minister Narendra Modi and US President Donald Trump are due to meet.
US Secretary of State Marco Rubio previously stated during an October 20 visit to Mumbai that both nations were about as close to signing an agreement as possible without an executed text, while Union Finance Minister Nirmala Sitharaman noted on October 5 that talks had reached a plateau.
“By all expectations, I think that there’s a desire to try to conclude the phase one deal, perhaps by the G20,” observers point out as the final technical details undergo review.