The US is angling for an early interim trade deal with India, aiming to push negotiations towards a final conclusion during the visit of a high-powered American trade delegation to New Delhi in the coming weeks.
India, however, is more cautious and is unlikely to take on commitments till the tariff scenario in the US unfolds and it is sure of the advantages it gains over its competitors, a source tracking the matter told businessline.
“India needs clarity on how American duties will impact both Indian goods and those of its global competitors before a trade deal with the US can be worked out,” the source said.
Expressing keenness for the pact, US Secretary of State Marco Rubio, who is on a four-day India visit, announced on Sunday that the US trade representative would visit India “very soon”. The two sides would “wind up with a trade agreement” that is enduring and mutually beneficial, he said.
US Ambassador to India Sergio Gor added that there were expectations that the India-US trade deal will be wrapped up within weeks.
Rubio is also using his visit to push for the deal and has discussed it extensively both with Prime Minister Narendra Modi and External Affairs Minister S Jaishankar, the source added.
Pressure on India
In fact, Rubio stepped up pressure on India to deliver on its assurance of purchasing $500 billion of American goods over five years, through a social media post on Sunday congratulating American diplomats, including Gor, for making it happen.
The post ignored the fact that India’s assurance, made in February this year, was a part of a framework deal with no legal tenability.
“Much water has flown under the bridge since the framework to the interim deal was announced in February. The US reciprocal tariffs have been withdrawn. The interim global tariffs of 10 per cent that replace them are valid till about July 24 2026. Most countries are on an equal footing with just the MFN tariffs,” the source pointed out.
Moreover, there is no clarity yet on what the outcome of the Section 301 investigations, against countries including India and many of its competitors, would be and if some penal tariffs would be imposed.
“New Delhi will definitely participate in negotiations with the US trade team in good faith. But an outcome would be difficult till India is assured of tariff advantage over other competing countries. And for that a clearer tariff picture has to emerge,” the source said.
The US remained India’s largest export market in FY26 with exports valued at $ 87.31 billion, marginally higher than exports of $ 86.51 billion in the previous fiscal.
However, India’s trade surplus with the US, a big reason for discontent in the Trump regime, declined in FY26 to $ 34.41 billion from $ 40.88 billion in FY25 as imports of American goods increased to $52.90 billion, from $ 45.63 billion.
Published on May 25, 2026