India-US trade pact takes a key step forward, draft nearing completion

The first tranche of the proposed India-US trade agreement has been finalised and is now undergoing legal drafting, Commerce Minister Piyush Goyal said on Thursday, signalling progress in negotiations between the two countries.

Speaking at the SRCC Centenary Conclave in Delhi, Goyal said the government hoped to complete the process soon. However, India would also assess whether the agreement offered its exporters a competitive edge over rival economies before putting it into operation.

"The US bilateral trade agreement first tranche has been finalised. It's going through final contours, the legal drafting, and we hope to be able to finalise that soon and operationalise that once we get comparable advantage or competitive advantage over our peer countries," Goyal said.

Both sides working towards an agreement

Commerce Secretary Rajesh Agrawal also indicated that discussions were progressing, expressing hope that the agreement would be concluded and signed soon.

"Probably we are in a very good zone. We anticipate closing the deal and signing the deal at the earliest possible time," he told reporters.

Agrawal said the timing of the signing would depend partly on the formalisation of the overall tariff structure in the US. He added that parallel work was underway in Washington, with the two sides expected to move towards signing at a mutually agreed time based on the outcomes of investigations under Section 301.

External Affairs Minister S Jaishankar had also indicated progress during the Bloomberg New Economy Forum this week, saying the negotiations were approaching a "landing point". He stressed that India needed to consider how its trade terms compared with those secured by competing economies.

"My sense is that this is an issue which is heading towards a landing point," Jaishankar said.

Tariffs remain a key factor

India and the US have been negotiating the proposed trade pact since early 2025. The agreement aims to address tariff-related friction, remove non-tariff barriers and improve market access for businesses in both countries. India has been seeking more favourable tariff terms for its goods than those available to competing exporters.

Earlier this month, US Trade Representative Jamieson Greer said the two countries were working to finalise the agreement, though a deal was not imminent. He said they had identified the outstanding issues and were working to resolve them.

The negotiations come amid strains in bilateral ties following punitive US tariffs imposed on India last year, disagreements over President Donald Trump's claims regarding the May 2025 India-Pakistan military clashes, and Washington's immigration measures, including a higher H-1B visa fee. Tensions have also persisted over US restrictions affecting a green-card processing programme used by major IT firms, including Tata Consultancy Services and Wipro.