New Delhi: The US has assured India of a “comparative tariff advantage” as Washington continues to finalise its own tariff structures on trade, ThePrint has learnt. A small team of American trade negotiators were in India in the first week of November to move forward the discussions on the bilateral trade agreement between the two countries.
Government sources confirmed that the US side has “assured a comparative tariff advantage” for Indian merchandise once the outcomes of investigations under Section 301 of the Trade Act of 1974 into structural excess capacity and production in manufacturing sectors are completed.
The assurance has been a key Indian demand to finalise and operationalise the first tranche of the bilateral trade agreement. The two countries announced a joint statement on the trade agreement on 7 February, which outlined the framework for the first tranche of the deal, which focuses solely on the trade in goods.
However, a final agreement has not been reached yet, as the US Supreme Court struck down the tariffs imposed by the US administration under the International Emergency Economic Powers Act (IEEPA) on 20 February.
Since then, negotiations have continued between the two governments, while India has maintained that any deal must ensure comparative tariff advantage for the export of its goods to the American market.
The latest assurance is a key breakthrough in talks, as New Delhi and Washington continue to await the outcomes of the Section 301 investigation. The US had launched two investigations under the Trade Act of 1974 in March. One was on the use of forced labour in production chains, and the second was on excess capacity.
The US had announced its findings in the forced labour investigations earlier this year, imposing a tariff rate of 10 percent on India and a number of other economies. Once the second investigation is completed, and the US announces its tariff rates, the two sides are expected to focus on finalising the comparative advantage that can be given to goods exported from India.
Negotiations for the bilateral trade agreement began in 2025, following Prime Minister Narendra Modi’s visit to Washington in February of that year. However, both sides have been unable to reach a final agreement, first due to differences in positions, which were eventually resolved earlier this year. However, the Supreme Court order striking down the US tariff regime imposed by President Donald Trump has further delayed the final negotiations for the deal.
Commerce Secretary Rajesh Agrawal confirmed Friday that a small team of American negotiators were in India in the first week of November to negotiate language around customs and trade facilitation.
“India and US trade talks are on the right path. There was a small [US] team here earlier this month, to discuss customs and trade facilitation. The chief negotiators have been in touch virtually,” Agrawal said in a briefing to the media.
Another source highlighted that the discussions earlier this month “resolved” a number of issues in the chapter relating to customs and trade facilitation in the first tranche of the bilateral trade deal. There are no plans for further physical rounds of negotiations at this moment in time. However, that is subject to change, the source said.
The US remains India’s largest export market. In the first seven months (April-October) of the 2026-2027 financial year, Indian merchandise exports to the US grew to $59.52 billion, from $51.99 billion during the same period in the last financial year, according to the latest data published by the Indian Ministry of Commerce and Industry.
The American market remains the second largest continental export destination for Indian merchandise, following Asia. The 14.48 percent overall growth in merchandise exports to the US in the first seven months of FY2026-2027 points to the continued resilience in Indian exports. In 2025, the US imposed tariffs up to 50 percent on Indian exports, in an effort to curtail the trade surplus in favour of New Delhi, as well as Russian oil purchases.
Despite American efforts, Indian merchandise continues to flow into US markets at record highs. The issues around trade, and the issue of tariffs saw a deterioration in the overall political relationship between India and the US.
PM Modi and President Trump were able to largely resolve the issues following a call in February that led to the framework of the first tranche of the bilateral trade deal. The two leaders are expected to meet during the Quad Leaders’ Summit next week in the Philippines. Modi is also expected to travel to the US next month for the G20 leaders’ summit being chaired by Trump.
(Edited by Gitanjali Das)
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