India, US begin talks on interim trade deal
New Delhi, June 3 -- Negotiating teams of India and the United States on Tuesday launched their three-day in-person discussions to finalise an interim bilateral trade agreement (BTA) with Washington seeking greater market access and New Delhi demanding comparative duty advantage for its goods in the American market, people familiar with the matter said.
Barring tariff architecture, all other matters were almost settled on February 7, the people added, requesting anonymity. The US is now working on a new legally tenable tariff architecture that would give advantage to Indian goods over those from competitors such as Vietnam, Bangladesh, Sri Lanka and Pakistan, they said.
On February 7 this year, the two countries reached a framework for an interim agreement after negotiations that lasted almost a year. But before the two could seal a deal, the US Supreme Court on February 20 invalidated the basis of the tariff architecture. India and the US have been engaged in interim BTA talks since March 2025, after Prime Minister Narendra Modi and President Donald Trump's joint statement on February 13, 2025.
"As the burden of tariff is ultimately borne by American consumers, the quantum of proposed import duty is less a concern for India. Indian exporters want tariffs on Indian goods must be lower than goods supplied by competitors in the US market. India must ensure that in the text of the deal," one person said.
Comparative advantage would immediately open a $30 trillion market for Indian exporters, especially small and medium enterprises, farmers and fishermen, he added. The interim deal, which is expected soon, will provide a huge market opportunity in labour-intensive sectors such as textiles, apparel, leather goods, footwear, plastic items, rubber products, organic chemicals, home decor, handicrafts, and select machinery, this person said.
Negotiations are progressing in the right direction in New Delhi and some outcome is expected by June 4, the people mentioned in the first instance said. While the visiting US negotiating is led by assistant USTR Brendan Lynch, India's is represented by chief negotiator and additional secretary, commerce Darpan Jain. This is the second in-person meeting between teams of the two countries after the US Supreme Court's verdict on February 20. The previous meeting of the two teams took place on April 23 in Washington.
According to the people mentioned above, the negotiations are proceeding on two broad tracks: establishing a legally tenable tariff architecture following the Supreme Court's ruling, and securing India's comparative advantage over competing exporters. The uniform tariff currently in force under Section 122 - applicable to all countries equally - gives India no edge over its rivals.
The need to rebuild the agreement on firm legal ground has been the central challenge since the US Supreme Court on February 20 struck down Trump's sweeping global tariffs as exceeding his statutory authority - a ruling that invalidated the proposed 18% tariff on Indian goods that was the cornerstone of the February 7 framework. The administration has since imposed a temporary 10% uniform tariff on all imports under Section 122 of the Trade Act of 1974, valid for 150 days and set to expire on July 24. Washington has also launched Section 301 investigations into alleged excess industrial capacity against several countries, including India as a bargaining tool....
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