India-US Trade Deal Awaiting New Tariff Framework, Proposed Pact Offers India 18% Tariff Advantage In US Market

New Delhi: India and the United States will sign their interim trade agreement only after the US finalises its new global tariff framework. A senior government official said the agreement is already negotiated, but the signing will take place once the US clearly defines its tariff structure.

Earlier, both countries had announced the framework for the first phase of a bilateral trade agreement. The deal was initially expected to be signed in March. However, recent developments in US tariff policies have delayed the process.

Changes In US Tariff System

The delay comes after a ruling by the US Supreme Court against the sweeping tariffs introduced by President Donald Trump under the International Emergency Economic Powers Act (IEEPA).

Following the ruling, the US government imposed temporary tariffs of about 10% on all countries for 150 days starting February 24. These tariffs were introduced under Article 122, which relates to balance-of-payment concerns.

Because of these changes, India and the US postponed a meeting between their chief negotiators that was planned to finalise the legal text of the agreement.

Tariff Advantage For India

Officials said the proposed trade deal gives India a tariff rate of around 18% in the US market. This is lower than the tariff levels applied to several competing countries such as China, Vietnam and Thailand.

However, the final tariff level may change depending on how the US designs its new global tariff structure. If other countries face higher tariffs, India may retain its current advantage. If tariffs for others fall, India’s rate could also be adjusted.

Negotiations Continue

Officials stressed that there is no disagreement between the two countries. The deal itself has been broadly finalised and both sides are now working on smaller details such as non-tariff barriers and issues related to other tariff provisions.

Commerce Secretary Rajesh Agarwal said India remains engaged with the US to complete a mutually beneficial agreement.

The government added that once the US finalises its new tariff architecture, that will be the right time for both countries to formally sign the trade deal.