India Likely to Delay Interim Trade Deal with US Amid Fresh Tariff Probes

New Delhi is likely to halt the signing of the interim trade agreement (ITA) with Washington for the next few months amid renewed moves from the White House to exert tariff pressure, Reuters reported, citing sources. This week, the Trump administration initiated fresh probes under Section 301 on 16 countries, including India, China and the European Union.

The move comes as US President Donald Trump’s team looks for alternative legal routes for tariff imposition after the US Supreme Court struck down the “Liberation Day” reciprocal tariffs. The new investigation examines “excess industrial capacity” and trade surpluses of other countries.

India and the US concluded the first phase of the ITA last month and were initially expected to sign the interim deal in March, followed by a broader bilateral trade agreement (BTA) later. However, the timeline is likely to slip by several months now, although Washington expects New Delhi to honour its commitments, the report said.

“It is reiterated that the two sides remain engaged for a mutually beneficial trade agreement,” the report quoted a spokesperson of India’s commerce ministry as saying. Meanwhile, a White House official said the US was continuing to work with India on finalising a deal.

Worries over the conclusion of the trade deal arose after the Supreme Court’s ruling, with the report stating that bilateral talks between the two countries lost momentum. “We are not in a hurry to sign any deal,” the report quoted one of the sources as saying. “The new investigation is a pressure tactic to force countries into signing deals after the court order. It’s a spanner in the works.”

India is likely to take a “wait and watch” approach to the latest probes and US trade policies. India is also mulling presenting its case to the Office of the United States Trade Representative and the World Trade Organization.

US Ambassador to India Sergio Gor said Trump had multiple other tools to impose tariffs, including through Section 301. “So we fully expect the nations that we’ve made deals with to honour those deals,” Gor said on Friday. “I think India will do that because it’s not just about honouring it—it’s a win-win situation.”

Section 301 under the Trade Act of 1974 is being actively explored before the present global tariff blanket of 10%, which Trump announced following the court ruling, expires in July. The current tariff is valid for 150 days.