India, US Begin Trade Talks and Rework Deal Amid Tariff Changes
India and the US began significant trade discussions to revive and adjust a proposed bilateral trade pact after alterations in US tariff policy disrupted a framework agreed upon earlier this year.
Commerce and Industry Minister Piyush Goyal held discussions with US Trade Representative Jamieson Greer in an effort to finalize an interim trade agreement before July 24, the date when Washington's temporary 10 percent tariff on imports from trade partners is set to end.
Greer's visit over two days follows the meeting between Prime Minister Narendra Modi and US President Donald Trump, which was their first in over a year, at the G7 summit in France on June 17, revitalizing trade negotiations viewed by both sides as essential for enhancing economic connections.
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The discussions aim to modify a framework agreement revealed in February that centered on tariff commitments which became uncertain due to a US Supreme Court decision nullifying extensive tariffs introduced by Trump. Obtaining preferential tariff benefits has emerged as a key goal for New Delhi following adjustments in US trade policy that diminished an edge India anticipated having over regional rivals like Vietnam and other ASEAN nations.
India and the US officially initiated BTA negotiations on February 13, 2025. On February 7, 2026, both parties declared that they had established a framework for a temporary agreement concerning mutually advantageous and reciprocal trade.
Under that framework, the US consented to lower tariffs on India to 18 percent from 50 percent. It had eliminated the 25 percent tariffs on Indian products for purchasing Russian oil and was set to reduce the remaining 25 percent to 18 percent as part of the agreement. However, the US Supreme Court decided against these tariffs.
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Within the established framework, India suggested removing or lowering tariffs on all US manufactured goods and various food and agricultural items, such as Dried Distillers' Grains (DDGs), red sorghum for livestock feed, tree nuts, fresh and processed fruits, soybean oil, wines and spirits, along with other products.
New Delhi has shown its plans to acquire $500 billion in US energy resources, aircraft and their components, precious metals, tech items, and coking coal in the upcoming five years.
Simultaneously, the US Trade Representative initiated two Section 301 investigations on March 11 and 12, involving approximately 60 economies. One concentrated on purported surplus industrial capacity, while the other investigated forced labor issues in international supply chains. India was part of both inquiries.
Within the framework, the US declared an 18 percent tariff on products from India. During that period, tariffs on nations competing with India were between 19 and 20 percent. However, all nations now encounter the same 10 percent extra charge.
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In 2025-26, India’s second-largest trading partner was the US. India’s exports to the US rose slightly by 0.92 percent to $87.3 billion in the previous fiscal year, while imports surged by 15.95 percent to $52.9 billion. The trade surplus fell to $34.4 billion in 2025-26, down from $40.89 billion in 2024-25.