India Resists Rushed US Trade Pact, Seeks Tariff Advantage Over China

India has rejected a quick trade agreement with the US in recent talks and is holding out for better terms, news agency Reuters reported, citing sources. The report said Prime Minister Narendra Modi is drawing confidence from new trading partners, eased economic risks and recent political gains at home.

After months of negotiations, the two countries failed to finalise an interim trade agreement during US Trade Representative Jamieson Greer's visit to New Delhi last month, despite expectations from both sides that a limited deal was within reach.

No Consensus On Key Demands

According to an Indian government official quoted in the report, there was no consensus because Washington did not offer assurances on New Delhi's key demands, including a tariff advantage over competitors such as China and a guarantee of no new US levies after the deal. "Our position is clear - we don't intend to rush into a deal that is not on favourable terms or compromise on red lines like ceding ground on agriculture," the official said.

The Trump administration had hoped for quick trade concessions from India, a strategic partner, as it prepares new tariffs likely to take effect later this month, the report said. A day after talks with Greer, Minister of Commerce and Industry Piyush Goyal said the US deal would not be implemented unless an advantage was ensured for India.

Most Indian goods currently face a 10% US tariff. The Trump administration is expected to introduce steeper tariffs later this month following probes into excess industrial capacity, a charge India has denied. Washington has also proposed new tariffs of up to 12.5% on several nations, including India, over allegations of failing to curb trade in goods made with forced labour.

The report said Washington's position has been that India needs to earn preferential trade treatment by making its own concessions. Washington remained engaged with New Delhi and still expected an agreement, though no timeline was offered. The report also said India had at times been slow and bureaucratic in the negotiations, signalling that no quick deal was likely.

Responding to questions about the impasse, White House spokesman Kush Desai told Reuters, "The Trump administration continues to productively engage with Indian officials to finalise a historic trade deal that puts Americans and America First."

India's Trade Position Strengthens

The news agency reported that rising exports, new trade deals with other countries and eased economic risks have strengthened India's position. India's overall goods exports rose about 15% year-on-year in April-June, despite disruptions from the war on Iran, supported by pricier petroleum shipments.

Exports to Gulf countries recovered to pre-war levels, rising to $5.3 billion in May from $2.62 billion in March, as traders shifted to alternative shipping routes. Exports to the United States rose to $17.29 billion during April and May.

India is also expanding access to other developed markets. A free trade pact with the UK is set to take effect this month, and an agreement with the EU is expected by early next year.

Another Indian official told Reuters that India is also considering the possibility that some US trade measures could face legal or political setbacks. A group of 22 Democratic state attorneys general have filed objections to the Trump administration's proposed tariffs linked to the forced labour probes.

The report added that legal uncertainty over US tariffs, along with Modi's recent state election victories, has helped India resist a hurried deal. Senior leaders of Modi's Bharatiya Janata Party have said publicly that trade agreements must protect Indian farmers and small businesses.