India, US talk trade again: The story so far and a deadline that could yield breakthrough

COmmerce government minister Piyush Goyal and US merchandise representative Jamieson Greer this hebdomad resumed talks in young new delhi aimed at clearing the last hurdles to an interim trade agreement. An American delegation led by Greer also met finance minister Nirmala Sitharaman on the sidelines. US ambassador to India Sergio Gor called the discussions a move “decisively toward finalising a strong bilateral trade agreement”.But this optimism isn’t new. Talks have cleared this stage before, only to be undone by the US Supreme Court’s ruling on tariffs. A look at how negotiations got here, what changed, and what remains unresolved.The beginning & the tariff conundrumPrime Minister Narendra Modi and US President Donald Trump met in Washington in February 2025 to discuss an interim bilateral trade agreement (BTA), which could pave the way for a comprehensive one, and set the ‘Mission 500’ target to double bilateral trade to over $500 billion by 2030, from about $200 billion.Even as the first face-to-face talks were launched in March 2025, the US on April 2 that year announced what it called “Liberation Day” tariffs – 10% baseline tariffs on all countries, plus country-wise additional tariffs.For India, the US decided on 25% reciprocal tariffs, and later in August imposed another 25% penalty tied to the country’s purchases of Russian oil. Together, US duty on Indian goods rose to as much as 50%. India called the penalty unfair and noted that larger Russian oil buyers, including China, faced no equivalent action.At least five rounds of face-to-face talks and several virtual negotiations were held before the two sides on February 2, 2026, agreed on an interim deal, under which the US would bring down the 25% reciprocal tariff on Indian goods to 18%.A framework for the interim deal was issued jointly on February 7. Under this, Washington agreed to cut the combined tariff on Indian goods from 50% to 18%, completely dropping the Russian oil penalty.Fine print of the frameworkIndia committed to eliminating or reducing tariffs on US industrial goods and a limited range of farm products, including quota-based imports of dried distillers’ grains and red sorghum for animal feed, alongside a pledge to purchase $500 billion of US goods over five years.The government also secured a commitment to "negotiated outcomes" on generic pharmaceuticals and ingredients, shielding them from blanket measures once a separate US investigation into pharma imports concluded. Sensitive sectors — wheat, rice, maize, soya, dairy, poultry and ethanol — were fully excluded.The framework also built in a safeguard for exactly this kind of disruption: a rebalancing clause stating that “in the event of any changes to the agreed upon tariffs of either country, the United States and India agree that the other country may modify its commitments”. That clause has since become the basis for India's position that the deal remains workable despite the upheaval.The framework was a commitment, not yet legally ratified. A formal deal was expected by mid-March. But crucially, it gave India a competitive advantage against Vietnam, Bangladesh and China, with which Indian exporters typically compete.US court rulingsThe framework was made irrelevant on February 20, when the US Supreme Court struck down the legal provisions Trump relied on to impose tariffs on any country. The court found the use of International Emergency Economic Powers Act as exceeding presidential statutory authority, effectively invalidating the 18% India rate that was the centrepiece of the February framework.The Trump administration then responded by invoking Section 122 of the Trade Act, 1974, to impose a 10% uniform global tariff. This measure however has limits and is due to expire on July 24.India then postponed a scheduled Washington visit while both sides assessed the implications.A second setback followed when the US Court of International Trade ruled that Section 122 tariff was itself unlawful, though the injunction applied narrowly to the two companies that had sued and the state of Washington, not as a universal block. In other words, the 10% duty has remained with a July 24 deadline while Washington renegotiates its deals with each trading partner.Washington’s next lever: Section 301With its tariff framework under repeated legal challenge, the Trump administration turned to Section 301 of the same 1974 law. This provision had survived court challenges during Trump's first term, carried no cap on tariff levels and no time limit, but required a formal investigation.In March, the US trade representative opened two such probes covering India: one into “excess industrial capacity” among 16 economies, and a separate one into forced labour covering 60 countries. Both investigations were aimed at rebuilding tariff leverage that the courts had ruled against.The forced-labour probe led to the latest complication: USTR on June 2, 2026, proposed 12.5% additional duty on India and 53 other countries, against 10% for six others, including competitors such as Pakistan and Indonesia. India has rejected the charge and has time until July 7 to formally respond. If the gap holds, it could erode the comparative advantage India has been negotiating for since the talks began.The outcome of the excess-capacity probe remains pending.Also read: ‘Moment to seize victory’: Pull out all stops to make India-US trade deal workAgriculture remains a fault lineFarm-sector access remains a fraught element.Washington wants greater access to the Indian market for American dairy, wheat and soyabean exports. India has resisted, citing the scale of subsistence farming, restrictions on genetically modified crops under Indian law, and religious sensitivities around non-vegetarian cattle feed.Greer told the US Congress in April this year that India remained “a tough nut to crack” on agriculture, though he saw room for compromise on narrower items such as distillers’ grains.Where talks stand now & what’s at stakeTalks between the two sides resumed in April, with India’s first face-to-face round in Washington in six months, followed by a three-day session in New Delhi in early June that both governments described as constructive.Commerce minister Goyal said he wants the first tranche of the BTA executed by mid-July, a timeline that lines up with the expiry of the Section 122 tariff. After late July, the US will need an alternative legal basis for imposing any additional tariff on countries, including India.The June 23-24 round of talks in New Delhi is the latest attempt to settle on that legally durable architecture before the deadline arrives. Ambassador Gor said only “1%” of the deal remains to be finalised, while US secretary of state Marco Rubio told a congressional committee on June 4 that he hoped to wrap up negotiations “in a few weeks”.For India, an agreement would restore the tariff advantage over export rivals such as China, Vietnam, Bangladesh and Indonesia that the February framework had promised. For the US, it would lock in a $500 billion Indian procurement commitment and progress toward the Mission 500 target of doubling bilateral trade by 2030.