India will finalise its long-pending Bilateral Trade Agreement (BTA) with the United States only once Washington offers Indian exporters a preferential tariff rate compared to competing economies, Commerce and Industry Minister Piyush Goyal said. “As soon as the US is able to give us the preferential rate in comparison to our competition, we will finalise the bilateral trade agreement,” Goyal said, naming Vietnam and Bangladesh as the competitors India wants to be priced better than or at par with.
The two countries first announced a trade deal framework in February 2026, and the US subsequently cut tariffs on Indian goods to 18% from an earlier 50%, a rate that already undercuts several regional competitors including Bangladesh, Sri Lanka, Taiwan, Pakistan, Indonesia, Malaysia and Thailand. Despite that reduction, talks on finalising the full bilateral agreement have dragged on for months as both sides negotiate market access and tariff treatment in specific sectors.
What Is Holding Up the India-US Bilateral Trade Agreement?
Negotiators remain divided over the exact tariff differential India wants locked in relative to competing Asian exporters, as well as market access terms in agriculture, dairy and digital trade, sectors where India has historically resisted opening its market. India’s position is that a preferential — not just reduced — tariff rate is necessary to give Indian exporters a durable competitive edge in the US market rather than simply matching what rivals already receive.
What Do Trade Officials Say About the Timeline?
Goyal is expected to travel to the United States later this month for the G20 trade ministers’ meeting in Milwaukee, Wisconsin, beginning September 30, where he is likely to hold bilateral talks with US Trade Representative Jamieson Greer on the sidelines. Officials on both sides have signalled continued engagement, but neither has set a firm deadline for concluding the full agreement, leaving exporters to plan around the current 18% tariff rate rather than an anticipated preferential one.
Market and Trade Reaction
Export-oriented sectors including textiles, gems and jewellery, and engineering goods continue to operate under the interim 18% US tariff rate, which has already improved competitiveness versus some regional rivals even without a finalised BTA. Indian exporters’ bodies have urged the government to close the deal quickly to lock in certainty, warning that prolonged uncertainty could deter US buyers from shifting sourcing decisively toward India.
What Happens Next?
The G20 trade ministers’ meeting in Milwaukee from September 30 is the next major venue where Indian and US officials are expected to engage directly on the BTA. Trade watchers will be looking for any signal of a narrower tariff gap or a revised timeline coming out of those sideline discussions, as well as any movement in the current 18% baseline rate.
Frequently Asked Questions
What tariff rate does India want from the US?
India wants a preferential tariff rate that is better than, or at least equal to, the rates offered to competing exporters such as Vietnam and Bangladesh, not just a reduced flat rate.
What is the current US tariff rate on Indian goods?
Following a February 2026 announcement, the US reduced tariffs on Indian goods to 18%, down from an earlier 50%, though the full bilateral trade agreement remains unfinalised.
When will India and the US next discuss the trade deal?
Commerce Minister Piyush Goyal is expected to hold talks with US Trade Representative Jamieson Greer on the sidelines of the G20 trade ministers’ meeting in Milwaukee starting September 30, 2026.
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