Union Commerce and Industry Minister Piyush Goyal has stated that the India-US trade agreement has been finalised but will not come into force until New Delhi secures a clear tariff advantage over competing manufacturing economies such as Vietnam, Thailand, the Philippines, China, Malaysia, Bangladesh and Sri Lanka.
Key Condition for the Deal
Speaking at the India Global Forum's UK-India Week 2026: Capital Frontiers conference in London, Goyal said: “Until that framework for securing a competitive advantage is finalised, we cannot bring a US deal into force. The day the US finds the appropriate tools and legal backing to provide us with that competitive advantage over our competitors, the deal is on.”
Goyal is in the UK on a three-day official visit to discuss the implementation of the India-UK Free Trade Agreement (FTA).
Background of Negotiations
His remarks follow meetings with US Trade Representative Ambassador Jamieson Greer in New Delhi from June 22 to 24, where both sides discussed enhanced market access, digital trade, supply-chain resilience, reduction of non-tariff barriers and greater collaboration in strategic sectors.
Goyal explained that an FTA is fundamentally about securing a comparative advantage over competitors to gain better access to markets. He said the agreement was reached and only the legal and tariff-related framework remained to be finalised.
Details of the Interim Trade Understanding
India and the US reached an interim trade understanding in February after months of negotiations. Under the framework, the US agreed to reduce tariffs on Indian exports from 25 per cent to 18 per cent. India agreed to expand market access for certain US products and deepen cooperation in sectors such as energy and defence. Additionally, a 25 per cent levy on Indian goods linked to imports of Russian crude was lifted.
“India was facing a 50 per cent tariff. We negotiated a deal to bring that down to 18 per cent, and the entire agreement was centred on the competitive advantage that this 18 per cent rate would give us over our neighbours and competing countries,” Goyal said.
Impact on Trade Relations
Goyal emphasised that the deal was completed on February 6, with both India and the US confirming it. “There is always some give and take, but the broad contours were agreed at that time, and our teams have been working to finalise the fine print ever since,” he added.
The minister's stance underscores India's strategy to ensure that any trade agreement provides a tangible competitive edge, particularly against regional manufacturing hubs that currently enjoy tariff advantages in the US market.
