NEW DELHI : India has declined a swift trade pact with the United States during recent dialogue, holding out for a superior agreement as Prime Minister Shri Narendra Modi draws strength from emerging trading partners and political victories at home, according to Reuters.
The two sides could not finalise a preliminary trade pact during the visit of US Trade Representative Jamieson Greer to New Delhi last month, ending months of talks without a deal, even though both had believed a narrow agreement was within grasp.
Commerce Minister Shri Piyush Goyal stated that India is open to a trade deal provided it offers the nation an edge over peers, signalling that key hurdles remain to an interim agreement.
What remains unresolved is a single but critical condition: India wants a formal guarantee that its exports will enjoy a tariff advantage over competing nations in the American market.
India wants to ensure that goods it exports to the United States, whether textiles, pharmaceuticals or engineering products, attract lower import duties than similar goods arriving from rival exporters such as Vietnam or Bangladesh.
The negotiations occur against a backdrop of uncertainty over ongoing US Section 301 investigations involving nearly 60 economies, including India.
The proposal includes a 10 per cent tariff on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan, and a 12. 5 per cent tariff on imports from 48 other economies, including India and China. Prime Minister Modi’s mission of diversifying exports by fast-tracking free trade agreements with other countries may have also given his team further leverage in negotiations with the US.
While trade with the US floundered, since 2025, India has concluded negotiations with the UK, EFTA, Oman, New Zealand and the European Union and launched fresh negotiations with GCC, Israel, EAEU, Chile and Canada.
Prime Minister Modi stated in February that political stability and predictability under his government have helped rebuild global investor confidence, allowing India to approach free trade agreements from a position of advantage.
India has concluded FTAs with 38 nations, with stronger manufacturing, services, and MSMEs enabling the country to negotiate trade pacts from a position of strength.
The stalemate continues as both nations work towards resolving their differences before a 10 per cent duty on Indian imports expires on 24 July.
