India, US talk trade again: The story so far and a deadline that could yield breakthrough

Commerce minister Piyush Goyal and US trade representative Jamieson Greer this week resumed talks in New Delhi aimed at clearing the last hurdles to an interim trade agreement. An American delegation led by Greer also met finance minister Nirmala Sitharaman on the sidelines. US ambassador to India Sergio Gor called the discussions a move “decisively toward finalising a strong bilateral trade agreement”.

Commerce minister Piyush Goyal with US Ambassador to India Sergio Gor and US trade representative Jamieson Greer, in New Delhi. ( Sergio Gor/X via ANI)

But this optimism isn’t new. Talks have cleared this stage before, only to be undone by the US Supreme Court’s ruling on tariffs. A look at how negotiations got here, what changed, and what remains unresolved.

Even as the first face-to-face talks were launched in March 2025, the US on April 2 that year announced what it called “Liberation Day” tariffs – 10% baseline tariffs on all countries, plus country-wise additional tariffs.

For India, the US decided on 25% reciprocal tariffs, and later in August imposed another 25% penalty tied to the country’s purchases of Russian oil. Together, US duty on Indian goods rose to as much as 50%. India called the penalty unfair and noted that larger Russian oil buyers, including China, faced no equivalent action.

At least five rounds of face-to-face talks and several virtual negotiations were held before the two sides on February 2, 2026, agreed on an interim deal, under which the US would bring down the 25% reciprocal tariff on Indian goods to 18%.

A framework for the interim deal was issued jointly on February 7. Under this, Washington agreed to cut the combined tariff on Indian goods from 50% to 18%, completely dropping the Russian oil penalty.

The government also secured a commitment to "negotiated outcomes" on generic pharmaceuticals and ingredients, shielding them from blanket measures once a separate US investigation into pharma imports concluded. Sensitive sectors — wheat, rice, maize, soya, dairy, poultry and ethanol — were fully excluded.

The framework also built in a safeguard for exactly this kind of disruption: a rebalancing clause stating that “in the event of any changes to the agreed upon tariffs of either country, the United States and India agree that the other country may modify its commitments”. That clause has since become the basis for India's position that the deal remains workable despite the upheaval.

The framework was a commitment, not yet legally ratified. A formal deal was expected by mid-March. But crucially, it gave India a competitive advantage against Vietnam, Bangladesh and China, with which Indian exporters typically compete.

The Trump administration then responded by invoking Section 122 of the Trade Act, 1974, to impose a 10% uniform global tariff. This measure however has limits and is due to expire on July 24.

India then postponed a scheduled Washington visit while both sides assessed the implications.

A second setback followed when the US Court of International Trade ruled that Section 122 tariff was itself unlawful, though the injunction applied narrowly to the two companies that had sued and the state of Washington, not as a universal block. In other words, the 10% duty has remained with a July 24 deadline while Washington renegotiates its deals with each trading partner.

In March, the US trade representative opened two such probes covering India: one into “excess industrial capacity” among 16 economies, and a separate one into forced labour covering 60 countries. Both investigations were aimed at rebuilding tariff leverage that the courts had ruled against.

The forced-labour probe led to the latest complication: USTR on June 2, 2026, proposed 12.5% additional duty on India and 53 other countries, against 10% for six others, including competitors such as Pakistan and Indonesia. India has rejected the charge and has time until July 7 to formally respond. If the gap holds, it could erode the comparative advantage India has been negotiating for since the talks began.

The outcome of the excess-capacity probe remains pending.

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Washington wants greater access to the Indian market for American dairy, wheat and soyabean exports. India has resisted, citing the scale of subsistence farming, restrictions on genetically modified crops under Indian law, and religious sensitivities around non-vegetarian cattle feed.

Greer told the US Congress in April this year that India remained “a tough nut to crack” on agriculture, though he saw room for compromise on narrower items such as distillers’ grains.

Commerce minister Goyal said he wants the first tranche of the BTA executed by mid-July, a timeline that lines up with the expiry of the Section 122 tariff. After late July, the US will need an alternative legal basis for imposing any additional tariff on countries, including India.

The June 23-24 round of talks in New Delhi is the latest attempt to settle on that legally durable architecture before the deadline arrives. Ambassador Gor said only “1%” of the deal remains to be finalised, while US secretary of state Marco Rubio told a congressional committee on June 4 that he hoped to wrap up negotiations “in a few weeks”.

For India, an agreement would restore the tariff advantage over export rivals such as China, Vietnam, Bangladesh and Indonesia that the February framework had promised. For the US, it would lock in a $500 billion Indian procurement commitment and progress toward the Mission 500 target of doubling bilateral trade by 2030.