Washington aims to accelerate interim agreement talks while New Delhi evaluates tariff impact on key export sectors

The United States is seeking an early interim trade agreement with India as negotiations continue ahead of a proposed visit by a senior American trade delegation to New Delhi in the coming weeks. India, however, is proceeding cautiously and is assessing how US tariff measures could affect both Indian exports and the country’s competitive position in global markets.

Officials familiar with the discussions said India is unlikely to commit to a deal until there is greater clarity on the evolving tariff environment in the United States and its implications for trade competitiveness.

The United States is pushing for an interim trade agreement with India as part of broader efforts to conclude a final pact. The move comes ahead of an expected visit by a high-powered American trade delegation to New Delhi in the coming weeks.

According to a source tracking the negotiations, India is adopting a more cautious approach and is unlikely to make commitments until there is more certainty regarding the tariff scenario in the United States and the relative advantages it may provide against competing economies.

“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.

US Secretary of State Marco Rubio, who is on a four-day India visit, stated on Sunday that the US Trade Representative would travel to India “very soon” as both sides work toward advancing discussions.

The two countries are expected to “wind up with a trade agreement” that is durable and mutually beneficial, he said.

US Ambassador to India Sergio Gor also said expectations were that the India-US trade deal would be finalized within weeks. Rubio is also using his visit to encourage faster progress on the agreement and has discussed the issue extensively with Prime Minister Narendra Modi and External Affairs Minister S Jaishankar, the source added.

Focus on American Goods Purchases

Rubio also increased pressure on India to fulfill its assurance of purchasing $500 billion of American goods over five years. The commitment was referenced in a social media post on Sunday congratulating American diplomats, including Gor, for helping facilitate the process.

The post did not mention that India’s assurance, made in February, was part of a framework deal without legal enforceability.

“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.

The source also said there was still no clarity regarding the outcome of the Section 301 investigations against several countries, including India and many of its competitors, or whether penal tariffs would eventually 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 United States remained India’s largest export market in FY26, with exports valued at $87.31 billion, slightly higher than the $86.51 billion recorded in the previous fiscal.

India’s trade surplus with the US 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.