The United States has assured India of a comparative tariff advantage for Indian goods, government sources said. The assurance applies once the US completes its investigation into structural excess capacity and manufacturing production, and India had made it a key demand for finalising the first part of a bilateral trade deal.
Commerce Secretary Rajesh Agrawal told reporters on Friday that the talks are on the right path. He said a small US team visited earlier this month to discuss customs and trade facilitation and that chief negotiators remain in touch virtually. A second source said the early-November talks settled several issues in the customs and trade facilitation chapter, and that no further in-person rounds are planned for now, although that could change.
Where the deal stands
The two countries issued a joint statement on 7 February 2026 outlining a framework for a first tranche that covers trade in goods only. No final agreement has been reached. The US Supreme Court struck down tariffs imposed under an emergency powers law on 20 February, which delayed the final talks. In 2025 the US had imposed tariffs of up to 50 per cent on Indian exports, citing India's trade surplus and its purchases of Russian oil.
In March 2026 Washington opened two investigations under Section 301 of its trade law, one on forced labour in production chains and one on excess capacity. The forced-labour inquiry has concluded, with a 10 per cent rate on India and several other economies. The excess-capacity inquiry is pending, and no rate has been given. Once it ends and the US announces its rates, the two sides are expected to fix the comparative advantage for Indian goods.
What comes next
Prime Minister Narendra Modi and President Donald Trump are expected to meet at the Quad leaders' summit in the Philippines next week, and Modi is expected to travel to the US next month for the G20 leaders' summit, which Trump is chairing. India's merchandise exports to the US were 59.52 billion dollars in April to October, up 14.48 per cent from 51.99 billion a year earlier, and the US remains India's largest export market. The assurance has been confirmed only by government sources, and the US has not been quoted on it.
