The first phase of the long-negotiated India-US trade deal is in the final stages of drafting and could be concluded soon, Commerce and Industry Minister Piyush Goyal said on Thursday — but he made it clear that New Delhi will sign only if Indian exporters secure a clear advantage over competing economies in the American market.
Speaking at an event in New Delhi, Goyal said the "first tranche" of the agreement was going through its final contours and legal vetting. "It's going through the final contours, the legal drafting, and we hope to be able to finalise that soon and operationalise that once we get comparable advantage or competitive advantage over our peer countries," the minister said, according to a statement issued by his office.
The remark captures the central Indian demand that has shaped the negotiations for months: whatever tariff concessions Washington offers must leave Indian goods no worse off — and preferably better off — than the terms enjoyed by rival exporting nations such as Bangladesh, Vietnam and Indonesia. India wants to ensure its exporters face tariffs no higher than those imposed on competing economies, a formulation that has become New Delhi's red line.
Trade Secretary Rajesh Agrawal echoed the minister's assessment, saying India anticipated concluding and signing the deal "at the earliest possible time". Agrawal added that New Delhi was seeking preferential market access and greater tariff stability under the proposed agreement — a signal that predictability, not just lower duties, is a core Indian objective.
The latest statements mark the most upbeat official signal in months on a negotiation that has repeatedly stalled. New Delhi and Washington agreed to a framework for the deal in February, a breakthrough that brought down the punitive tariff on most Indian goods to 18 per cent from 50 per cent. That 50 per cent levy had been imposed in August last year after a previous round of talks collapsed, rattling exporters and casting a shadow over the bilateral economic relationship.
Since the February framework, however, officials on both sides have signalled that the push toward a final agreement had slowed, with differences persisting on market access, agriculture, digital trade and the sequencing of tariff cuts. Goyal's comments suggest the logjam may finally be breaking — at least for the first tranche, which is expected to lock in the tariff relief already agreed while setting the stage for deeper negotiations.
The stakes are enormous for Indian industry. The United States is India's largest export destination, and bilateral goods trade has held up despite the tariff turbulence. India's goods exports to the US rose to $42.79 billion in April-August from $40.39 billion a year earlier, and in fiscal year 2025-26 India recorded a trade surplus of nearly $34 billion with the United States. Exporters of textiles, engineering goods, gems and jewellery, pharmaceuticals and agricultural products have all been watching the talks closely, since the difference between an 18 per cent and a 50 per cent duty can decide whether Indian goods remain competitive on American shelves.
The "comparable advantage" doctrine Goyal articulated reflects a hard-headed calculation. In Washington's recent trade actions, different countries have faced very different tariff rates, and Indian negotiators have studied those differentials closely. If Vietnam or Bangladesh secures a lower effective rate on competing products, Indian exporters could lose market share even with a deal in hand. New Delhi's insistence on parity-or-better is therefore not just posturing — it is the commercial core of the agreement.
For the United States, a deal with India would be a significant win as well. American exporters want greater access to India's vast market for agricultural products, medical devices, and energy, while Washington views deeper economic integration with New Delhi as strategically important in the Indo-Pacific. The February framework was widely read as both sides choosing pragmatism over maximalism after the bruising collapse of the earlier round.
What exactly the "first tranche" will contain is the subject of the legal drafting now underway, but the shape is becoming clear from official statements. The February framework that cut the punitive tariff from 50 per cent to 18 per cent on most Indian goods is expected to be locked in as the foundation, giving exporters the stability they have been demanding. Around that core, negotiators are working on the plumbing that makes tariff cuts real: rules of origin that determine which goods qualify, safeguard clauses that allow duties to snap back if imports surge unexpectedly, and review mechanisms that let both sides revisit the terms as trade flows evolve. Getting this architecture right matters as much as the headline tariff number, because a poorly drafted agreement can leave exporters tangled in paperwork that wipes out the benefit of lower duties.
Beyond the first tranche lies a longer road. A full bilateral trade agreement would tackle the harder issues — agricultural market access, where India's politically sensitive farm sector meets American export ambitions; digital trade and data governance; government procurement; and labour and environment standards. Those chapters are where previous rounds foundered, and officials on both sides have been careful not to promise timelines for them. The tranche-by-tranche approach is itself a lesson learned: rather than holding everything hostage to a single grand bargain, New Delhi and Washington are banking incremental wins, building trust and commercial momentum step by step.
For now, though, the direction of travel is positive. If the legal drafting concludes as Goyal hopes, the coming weeks could see the first concrete India-US trade agreement in years move from negotiation rooms to signature pages — with New Delhi determined that its exporters emerge with an edge, not just a deal.
(Reporting based on Reuters.)