Commerce Minister Piyush Goyal says India won’t tie the US trade pact to any deadline
Next round of negotiations delayed due to US government shutdown
Economists warn fresh US measures could hurt MSMEs and labour-intensive exports
India is not pursuing any trade agreement with a fixed deadline, and a deal will only be finalised once the interests of farmers, fishermen and MSMEs are fully safeguarded, Commerce and Industry Minister Piyush Goyal said on Saturday.
Responding to questions on the timeline for the long-awaited trade agreement with the United States (US), Goyal said, “Talks are going on in a cordial atmosphere. We will notify when the time comes.”
A team from India is currently in the US to discuss tariff-related issues, Commerce Secretary Rajesh Agrawal had confirmed earlier this week. However, he added that the ongoing US government shutdown has made it “not the right time” to hold the next official round of negotiations on the trade pact.
Goyal’s remarks come amid US demands for greater market access in India’s agriculture sector and a series of protectionist measures announced by the Donald Trump administration in recent months. Before India could fully absorb the impact of the 25% reciprocal and 25% penal tariffs on its exports that took effect at the end of August, Washington imposed a $100,000 fee on H-1B visas. The administration has also proposed other measures, including the HIRE Act targeting outsourcing and a 100% tax on patented pharmaceuticals, which could further weigh on India’s economic prospects.
Goyal was addressing the media at a press conference in New Delhi on the outcome of the GST reforms, where Finance Minister Nirmala Sitharaman also spoke about the impact of US tariffs on Indian exports.
“Sectors impacted by US tariffs like textiles and marine products are talking to us through associations. But they haven’t yet given me an assessment of the impact,” Sitharaman said, referring to industry consultations underway as part of the government’s review of the tariff situation.
Meanwhile, economists have warned that recent US trade policy measures could weigh on India’s export-driven sectors. According to Nagesh Kumar, an external member of the Reserve Bank of India’s Monetary Policy Committee (MPC), while the effect on GDP growth may be limited to 40–60 basis points, the impact on MSMEs and employment could be far more significant.
“The US is a much more important market for our labour-intensive goods than for all imports,” Kumar said in the MPC minutes released on Wednesday. “The US accounts for nearly 20% of India’s merchandise exports, but our exposure is much higher, around 33%, for labour-intensive goods such as textiles and garments, leather, gems and jewellery, and processed foods like shrimp.”
These sectors are dominated by MSMEs and contribute around 40% of jobs in manufacturing. Analysts warn that the high penal tariffs imposed by the US could therefore have a disproportionate impact on small exporters and employment generation in India.
