India-US Trade Deal Faces Fresh Uncertainty as Tariff Rules Change, Piyush Goyal Signals Reassessment.
Highlights
- Trade Deal: India and the US have yet to finalise their proposed interim trade agreement.
- Piyush Goyal: Commerce Minister says changed circumstances must be considered before finalising the pact.
- Tariff Changes: A US Supreme Court ruling altered the tariff framework announced earlier this year.
- Exporters Concerned: Indian textile, engineering and other export-oriented businesses face uncertainty over future duties.
India-US Trade Deal: Why Is the Agreement Facing Fresh Uncertainty?
India’s proposed trade agreement with the United States is facing fresh uncertainty as both countries reassess the terms of their interim trade pact following major changes in American tariff policies.
Union Commerce and Industry Minister Piyush Goyal said that circumstances have changed since India and the US announced a framework for the first phase of their Bilateral Trade Agreement (BTA) in February 2026. The final agreement will need to reflect these developments.
Speaking at an event organised by the PHD Chamber of Commerce and Industry in New Delhi, Goyal indicated that India remains focused on securing favourable trade conditions for its exporters.
What Has Changed in the India-US Trade Deal?
India and the United States announced a framework for an interim trade agreement in February 2026.
Under that understanding, the US had agreed to remove an additional 25% tariff linked to India’s purchases of Russian oil and reduce the reciprocal tariff rate on Indian goods to 18%.
However, the US Supreme Court subsequently invalidated tariffs imposed under the International Emergency Economic Powers Act (IEEPA).
Washington then introduced a temporary 10% tariff on imports from multiple countries, changing the conditions under which the original agreement had been negotiated.
Why Are Negotiations Taking Longer?
The two countries are still working through several unresolved issues, including tariff treatment and market access.
US Trade Representative Jamieson Greer recently indicated that negotiations were in their final phase but that an agreement was not imminent.
Finance Minister Nirmala Sitharaman also described the negotiations as having reached a plateau, suggesting limited room for further compromise.
Goyal, however, has maintained that the broad understanding reached earlier remains intact and that both sides are working through the legal and tariff-related details.
How Could Indian Exporters Be Affected?
The United States is India’s largest export market, making the outcome of the negotiations particularly important for Indian businesses.
According to Reuters, India’s merchandise exports to the US reached approximately $42.79 billion during April–August 2026.
Uncertainty over future tariffs could make it difficult for exporters to negotiate long-term contracts, plan production and remain competitive against suppliers from other countries.
Industries such as textiles, engineering goods and other export-oriented manufacturing sectors could face pressure if unfavourable tariff conditions continue.
India Expands Trade Talks With Other Countries
While negotiations with Washington continue, India is also working to diversify its international trade partnerships.
Goyal said India would begin trade discussions with Mexico next week. Negotiations are also progressing with Canada, while engagement continues with Israel, Chile, the Gulf Cooperation Council and the Eurasian Economic Union.
Trade ministers from the United Kingdom and Canada are also expected to visit India next week for discussions aimed at strengthening economic cooperation.
What Happens Next?
The next major development will depend on whether India and the US can agree on a tariff structure that provides Indian exporters with competitive access to the American market.
Although both governments remain engaged, no final signing date has been confirmed.
For Indian exporters, a predictable tariff regime and a finalised trade agreement could provide greater certainty for investment, production and international orders.
