India and the United States have moved closer to finalising a bilateral trade agreement. Commerce and Industry Minister Piyush Goyal shared the update during his visit to the United Kingdom. However, he made one thing clear. India will sign the deal only if it secures a clear tariff advantage over competing countries.
Speaking at the India Global Forum's 'UK-India Week 2026: Capital Frontiers' in London, Goyal said both sides have almost completed the negotiations. He also stressed that India will not compromise on its economic interests.
India Wants Better Terms for Its Exporters
Goyal said the United States and India negotiated the proposed agreement when Washington imposed reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA).
At that time, India faced a 50 percent tariff. Even then, India enjoyed a better tariff position than many neighbouring and competing countries. That advantage made the proposed agreement attractive for Indian exporters.
“The whole deal was centred around that competitive advantage we got with that 18 per cent over our neighbours and competing countries. We were lower than all our neighbouring countries and all our ASEAN countries other than Singapore. That is why the deal was attractive for us," he said.
Goyal said India wants to protect that advantage before signing the agreement.
Negotiations Enter the Final Stage
Goyal made these remarks after US Trade Representative Jamieson Greer visited New Delhi. During the visit, Greer met the commerce minister and senior Indian officials. They discussed the framework for the first phase of the India-US bilateral trade agreement.
Those discussions followed chief negotiator-level talks held earlier this month. As a result, both countries now expect to conclude the agreement soon.
Earlier this month, US President Donald Trump also said Washington and New Delhi were "very close" to reaching a deal. Goyal also said negotiators were working to resolve the remaining issues.
US Legal Changes Complicate the Talks
Despite the progress, Goyal said recent legal developments in the United States have created fresh challenges.
He said the US Supreme Court's decision on tariff measures and the expiry of the current 10 percent tariff arrangement on July 24 have changed the situation.
“With the Supreme Court striking down the tariffs and the 10 per cent which expires on July 24, we obviously have to have some reason to be able to enter into force that agreement we have already agreed upon," he said.
These developments have forced both countries to review parts of the agreement before implementing it.
India Seeks a Lasting Competitive Edge
Goyal said India wants firm guarantees for its exporters. The government wants Indian products to continue paying lower tariffs than goods from countries with similar manufacturing costs.
He named Vietnam, Thailand, the Philippines, Indonesia, China, Malaysia, Bangladesh, Sri Lanka and other neighbouring countries as India's major competitors.
“We have to ensure that we get a competitive advantage over what is being paid by countries in the same stage of development or same cost structures as India has, whether it is Vietnam, Thailand, Philippines, Indonesia, China, Malaysia, apart from Bangladesh, Sri Lanka and all our neighbours," Goyal said.
He added that India cannot bring the agreement into force until the United States creates a legal framework that guarantees this advantage.
“Until that framework of getting that competitive advantage can be finalised, we can’t enter into force a US deal. That’s broadly the discussions on how the US will find the appropriate tools and legal backing to give us that competitive advantage over our competition. The day that happens, the deal is on," Goyal added.
Tariff Policy Remains a Key Issue
In February, both countries agreed on a framework that proposed reducing US tariffs on Indian goods from 50 percent to 18 percent. That move would have given Indian exporters a major edge over rival suppliers.
However, changes in US tariff policy forced both governments to revisit parts of the agreement.
The framework also allows either country to revise its commitments if tariff rates change. Therefore, future US trade policy will play a key role in deciding when the agreement comes into force.
Trade Partnership Continues to Grow
The United States remained India's second-largest trading partner during the 2025-26 financial year.
India exported goods worth USD 87.3 billion to the United States during the year. Meanwhile, India imported goods worth USD 52.9 billion from the US. These figures underline the growing importance of trade between the two countries.