New Delhi: India is likely to delay signing a trade agreement with the United States for several months as new investigations by the US government create fresh uncertainty around tariffs and trade policies. Government sources said New Delhi will take a cautious approach before moving forward with any agreement.
Earlier, India had expected to sign an interim trade deal with Washington in March, followed by a broader agreement later. The understanding came after US President Donald Trump agreed in early February to reduce high tariffs on Indian imports.
In return, India was expected to make several commitments. These included reducing imports of Russian oil, lowering duties on some US goods, and increasing purchases of American products.
New US Investigation Creates Fresh Concerns
The timeline for the agreement has now been pushed back after the US launched a new investigation into what it described as “excess industrial capacity” in manufacturing sectors among several trading partners, including India.
The investigation has been started under Section 301 of the US Trade Act of 1974. According to Indian officials, the probe has complicated ongoing discussions and created additional pressure on countries negotiating trade agreements with the US.
One government source said India is not in a hurry to finalise the deal and prefers to observe how US trade policies evolve.
Tariffs and Global Events Affect Negotiations
Trade talks also slowed after the US Supreme Court struck down certain tariffs imposed by the Trump administration in late February. Since then, officials say there have been no major negotiations between the two sides.
Global developments have also played a role. The United States has been focusing on the conflict involving Iran and the resulting energy supply issues.
While Washington had earlier expected India to curb purchases of Russian oil, New Delhi only slowed imports rather than completely stopping them.
US Expects India To Honour Commitments
Despite the delay, US officials say they still expect India to honour commitments made earlier. US Ambassador to India Sergio Gor said the agreement would benefit both countries.
Following the Supreme Court ruling, the US imposed a temporary 10% tariff on imports from all countries until July 24. India is now seeking clarity on whether its exports to the US will face this rate or a different tariff level.
Experts say India’s cautious approach is practical, as it allows the country to better understand how future US tariff policies may develop before signing any agreement.
