New Delhi: In a significant breakthrough towards concluding the India-U.S. interim trade deal, the U.S. has assured India of a comparative advantage over its competitors once it finalises its tariff structure, a senior official in the Ministry of Commerce and Industry said, adding that both sides are working to complete the deal by the end of the current financial year.
The Assurance
“Talks between India and the U.S. are ongoing and the U.S. has assured us of a comparative advantage over our competitor countries,” the senior official said on condition of anonymity, as details of the bilateral discussions have not been made public.
Indian officials have repeatedly said India would move ahead with a deal only if such an advantage was assured, as agreed in the February 2026 joint statement between Prime Minister Narendra Modi and U.S. President Donald Trump. That statement said the two countries “commit to provide each other preferential market access in sectors of respective interest on a sustained basis.”
The Tariff Obstacles
Since then, however, the U.S. has imposed additional 10% ‘forced labour’ tariffs on India — the same as on some competitors such as Indonesia, Malaysia, Pakistan and Sri Lanka.
Further, the U.S. is conducting another investigation into India and several other countries related to excess capacity, which could see additional tariffs levied. The official said the U.S. assurance of comparative advantage takes this future tariff into account.
A Reciprocal Clause
The official said both sides had agreed to a clause stating that if either country changes its tariffs on the other, the second country can also modify its commitments under the deal — also part of the February joint statement.
Such a clause is “not usual” in trade deals India enters into, the official noted, but was specifically included in the U.S. deal.
‘On the Right Track’
Separately, Commerce Secretary Rajesh Agrawal confirmed that a two-man U.S. team visited India earlier this month, during which substantial progress was made towards finalising the text.
“There was a small team from the U.S. that visited India for discussions on customs and trade facilitation in the first week of November,” he said. “The discussions went off in a very positive direction. A lot of issues were closed, and there was convergence in a lot of areas.”
He added that chief negotiators from both sides regularly speak virtually to “iron out some of the language issues or some of the small fixes that remain in the agreement,” and that talks were “on the right track.”
