TradeDeal – India and US Move Toward Legal Accord
TradeDeal – India is preparing to take the next decisive step in finalising its proposed trade agreement with the United States, as senior officials confirm that discussions are entering the legal drafting stage. The development signals steady progress in one of the most closely watched economic engagements between the two countries.
Delegation to Travel to Washington
The Commerce Ministry announced on Monday that chief negotiator Darpan Jain will travel to Washington next week to lead a delegation tasked with completing the legal text of the proposed India–US trade agreement. The visit follows the joint statement issued earlier this month, which outlined the broad framework of the deal.
Commerce Secretary Rajesh Agrawal said that negotiators are now translating the framework understanding into a binding legal document. According to him, both sides are working toward a target of signing the agreement by March 2026.
“Our aim is to ensure that the legal agreement is finalised and signed within the planned timeline,” Agrawal told reporters while responding to questions about the progress of talks.
Focus on Tariff Adjustments
A key issue under discussion is the reduction of the reciprocal tariff imposed by the United States. The rate, currently set at 25 percent, is expected to be brought down to 18 percent under the understanding reached between the two governments.
Agrawal noted that the US administration is processing the matter. India anticipates that the decision could be completed this week. If not, the visiting delegation will raise the issue directly during its meetings in Washington to understand any reasons for delay.
The tariff discussions are central to the broader trade deal, as they directly impact the cost competitiveness of Indian goods in the American market. Officials indicated that both sides remain engaged and optimistic about resolving the matter without further setbacks.
Background of Additional Tariffs
The tariff issue traces back to earlier trade measures imposed by the United States. At one stage, Washington applied an additional 50 percent tariff on Indian exports. This included a 25 percent reciprocal tariff and another 25 percent linked to India’s purchase of crude oil from Russia.
Following diplomatic engagement and India’s decision not to continue buying crude from Russia, the US withdrew the 25 percent tariff associated with the oil purchases. However, the reciprocal tariff remains in place and has yet to be reduced to the agreed 18 percent.
Agrawal clarified that the Most Favoured Nation (MFN) tariffs applicable under global trade rules will remain unchanged. As a result, once the reciprocal tariff is lowered, the effective duty on Indian goods entering the US market will stand at 18 percent plus the existing MFN rates.
Broader Trade Implications
The proposed agreement is expected to provide greater predictability and stability in trade relations between the two economies. India and the United States have been strengthening economic ties in recent years, with bilateral trade reaching significant levels across sectors such as technology, pharmaceuticals, agriculture, and manufacturing.
Officials believe that a formal legal agreement will reduce uncertainty for exporters and investors on both sides. It may also create space for further cooperation in emerging areas including supply chain resilience and advanced manufacturing.
While negotiations continue, both governments appear committed to meeting their stated timeline. The upcoming visit to Washington is seen as a critical step in converting months of diplomatic engagement into a structured and enforceable trade framework.