NEW DELHI: The first phase of the India-US trade deal is in the final stages of drafting, commerce and industry minister Piyush Goyal said on Thursday, signalling that Washington and New Delhi are closing in on an initial agreement even as India insists the India-US trade deal must deliver a competitive edge for its exporters over rival economies. Speaking at an event in the capital, Goyal said the “first tranche” of the pact was going through its final contours and legal vetting, raising hopes of a breakthrough after months in which officials on both sides conceded that negotiations had slowed.
India-US trade deal: what Goyal said on Thursday
Goyal said the first tranche of the India-US trade deal would be finalised soon, but stressed that New Delhi would proceed only if Indian exporters secured an advantage over competing economies such as Bangladesh, Vietnam and Indonesia. “It’s going through the final contours, the legal drafting, and we hope to be able to finalise that soon and operationalise that once we get comparable advantage or competitive advantage over our peer countries,” a statement from his office quoted him as saying. India wants to ensure its exporters face tariffs no higher than those imposed on competing economies in the American market.
India-US trade deal and the tariff question
The two countries agreed a framework for the India-US trade deal in February, which brought down to 18 per cent from 50 per cent the punitive tariff on most Indian goods imposed in August last year after a previous round of talks collapsed. Since then, however, negotiations have run into hurdles, with officials on both sides signalling that efforts to reach a final agreement have slowed. The tariff question remains the centrepiece of the talks: Indian exporters of textiles, engineering goods and pharmaceuticals are watching closely for preferential market access and greater tariff stability under the proposed agreement.
Trade Secretary Rajesh Agrawal echoed Goyal’s comments, saying, “We anticipate concluding and signing the trade deal at the earliest possible time,” and adding that India was seeking preferential market access under the proposed pact. The stakes are considerable: India’s goods exports to the United States rose to $42.79 billion in April-August from $40.39 billion a year earlier, and in the fiscal year 2025/26 India recorded a trade surplus of nearly $34 billion with the United States.
The February framework that underpins the current India-US trade deal talks marked a sharp de-escalation after months of tension, cutting the punitive levy on most Indian goods from 50 per cent to 18 per cent. That earlier round of 50 per cent duties, imposed in August last year after a previous round of talks collapsed, had rattled exporters of textiles, engineering goods, gems and jewellery, prompting New Delhi to seek alternative markets while keeping the door open for negotiations.
For Indian industry, the appeal of a completed India-US trade deal lies in certainty as much as in lower tariffs. Exporters have long complained that stop-start negotiations make long-term contracts with American buyers difficult to price, and business groups have urged both governments to lock in the first-phase commitments quickly so that the tariff advantage over competing suppliers is not eroded by delay.
India-US trade deal: what comes next
With legal drafting under way, attention now turns to whether the first phase of the India-US trade deal can be operationalised quickly enough to give exporters certainty ahead of the peak buying season in the US. Business groups have urged both governments to lock in the tariff advantage before competing suppliers cement their own arrangements. For now, Goyal’s remarks suggest the political will exists on the Indian side, provided the fine print delivers the competitive edge New Delhi has made its non-negotiable condition for signing. Officials on both sides have in recent weeks signalled that efforts to reach a final agreement had slowed, making Goyal’s remarks the most upbeat assessment in months. Whether the legal drafting concludes in the coming weeks will be the clearest signal yet of whether the two sides can convert the February framework into a durable agreement.