India-US Trade Deal On Hold; Goyal Demands Tariff Edge Over Vietnam, China

India will finalise the details of its trade agreement with the United States once Washington provides New Delhi with a tariff advantage over competing economies, Commerce and Industry Minister Piyush Goyal said on Thursday.

Speaking at a national workshop on leveraging free trade agreements (FTAs), Goyal said India had secured a favourable outcome in sensitive sectors and would move towards finalising the deal once preferential tariff treatment was assured.

He also said India’s goods exports continued to grow in August and urged industry associations to set more ambitious export targets.

India Wants Edge Over Competing Economies

Goyal has repeatedly maintained that the agreement will become operational only after the US establishes a framework that gives Indian exporters a clear tariff advantage over competing manufacturing hubs such as Vietnam, Thailand, the Philippines, China, Malaysia, Bangladesh and Sri Lanka.

Under the interim arrangement, India’s agriculture and dairy sectors remain protected. Meanwhile, sectors including MSMEs, textiles, gems and jewellery, leather and marine products are expected to benefit once the lower US tariff comes into effect.

What The Interim Deal Covers

The India-US trade agreement was announced through a Joint Statement by US President Donald Trump in February 2026, following a conversation with Prime Minister Narendra Modi in which the two leaders agreed on a framework for an interim reciprocal trade agreement, according to a fact sheet issued by the US Mission in India.

Under the arrangement, the US removed an additional 25% tariff on Indian imports linked to India’s purchases of Russian oil, following India’s commitment to stop those purchases.

The US also agreed to reduce its base reciprocal tariff on Indian goods from 25% to 18%. Together, the measures bring India’s effective tariff burden down from a peak of 50% to 18%.

India, in turn, has agreed to eliminate or reduce tariffs on US industrial goods and a broad range of American agricultural and food products. These include dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.

India has also committed to purchasing more than $500 billion of US energy, information and communication technology, coal and other products, while addressing non-tariff barriers in priority sectors.

The two sides are also expected to negotiate rules of origin and bilateral digital trade rules.

Goyal Highlights India’s Growth Momentum

Goyal also pointed to India’s 7.8% GDP growth in the June quarter, describing it as “no mean achievement” given the uncertain global environment.

Without naming him, Goyal appeared to respond to Leader of the Opposition Rahul Gandhi’s recent description of the Indian economy as a “dead economy”, urging stakeholders not to be influenced by such criticism.

He said collective efforts were needed to transform India from an inward-looking economy into “an international player of significance” and work towards the country’s ambition of becoming a $30 trillion economy by 2047.

Exports Cross $200 Billion

India’s merchandise exports crossed the $200 billion mark for the current financial year by August 21, rising more than 15%, according to government estimates. Petroleum products, electronics and engineering goods were among the key drivers.

The government is targeting $1 trillion in combined goods and services exports this fiscal year, compared with $863 billion in the previous financial year.

For India, securing a tariff advantage in the US remains central to completing the interim trade agreement, particularly as Indian exporters compete with other Asian manufacturing economies for access to the American market.