India to Operationalise US Trade Deal Only After Securing Tariff Advantage Over Competing Economies

India is likely to operationalise its trade deal with the US only after ensuring that the tariff rate it receives is lower than that imposed on competing economies, a senior commerce ministry official said on Monday.

“I can finalise the deal even today, but I will operationalise only once I am sure all my competitors are paying more than me,” the official said. “The 10 per cent will lapse on July 24. So if they want us to pay any additional tariff, they have to finish the Section 301 process, and they have to give us a better comparable advantage over competitors.”

The official added that New Delhi has sought assurance from Washington that there would not be any more probes against India under Section 301, referring to ongoing discussions with Assistant US Trade Representative for South and Central Asia Brendan Lynch and his team.

According to the official, the US is likely to impose a relatively low tariff on India under Section 301 of the US Trade Act of 1974.

While the Office of the US Trade Representative last week proposed a 12.5 per cent duty on Indian goods under Section 301, the tariff would not take effect immediately as Washington has invited public comments on the proposed action until July 6.

The proposal follows an investigation against India and several other economies under Section 301 of the US Trade Act of 1974, which allows Washington to probe and act against trade practices it considers harmful to US commerce.

New Delhi has also sought assurances from Washington that India would not face any further investigations under Section 301, the official indicated.

India and the US held another round of negotiations last week during a four-day visit to New Delhi by Assistant US Trade Representative for South and Central Asia Brendan Lynch and his team.

On the India-UK Free Trade Agreement (FTA), implementation is likely to take longer, according to the official, as New Delhi is unwilling to forgo benefits on 88 steel tariff lines due to London’s safeguard measures on the metal.

The UK has reduced tariff-free steel import quotas by 60 per cent, citing concerns over dumping. From July, steel shipments exceeding quota limits will attract a 50 per cent duty. The official said India will not accept the 50 per cent and will proceed with the deal.

Commerce and Industry Minister Piyush Goyal met UK Secretary of State for Business and Trade Peter Kyle in New Delhi last week to discuss implementation of the FTA signed in July 2025.

Following the meeting, the two sides resolved one of the three outstanding issues, the official said, without identifying the matter. On the second and third issues, both sides have exchanged offers and counter questions, with discussions ongoing.

The UK’s safeguard measures on steel imports and its Carbon Border Adjustment Mechanism are among the issues India is seeking to address before implementing the agreement.

India’s goods exports rose 15 per cent year-on-year in April and May, the official said. Merchandise exports stood at $76.59 billion in April-May 2025.

A 15 per cent increase implies cumulative exports of about $88.1 billion during the first two months of the current financial year.

Excluding petroleum products, merchandise exports grew 11 per cent during April-May, the official said. The commerce ministry is scheduled to release May trade data on June 15.

India’s exports expanded 13.8 per cent in April to a four-year high of $43.56 billion.

The ₹33,660 crore Bharat Audyogik Vikas Yojna (BHAVYA) scheme will help attract investments, create jobs, and provide modern social infrastructure in 100 industrial parks to be developed under the initiative, Commerce and Industry Minister Piyush Goyal said on Monday. It aims to develop world-class industrial infrastructure, unlock manufacturing potential and drive economic growth.