NEW DELHI, June 21 -- First phase of India-US bilateral trade agreement is poised for getting final touches this week as US Trade Representative Jamieson Greer and Commerce and Industry Minister Piyush Goyal are scheduled to hold two-day talks this week.
"For the US trade deal talks, tomorrow my counterpart is coming to Delhi," Goyal told reporters in Mumbai.
The meeting followed chief negotiator-level discussions on the pact held earlier this month (June 2-4) here in New Delhi.
Commerce Secretary Rajesh Agrawal has recently stated that the discussions between the two ministers are expected to be centred around giving final touches to the framework deal.
On June 5, Goyal said India and the US are moving towards closing all the open ends of the interim trade agreement, and both sides are likely to execute the "very, very vibrant" first phase of the BTA by the middle of next month.
The 10 per cent temporary tariff imposed by the US on all its trading partners on February 24, 2026, for 150 days will expire on July 24. After that, the MFN (most favoured nation) tariffs will come into force on goods imported by the US.
The temporary tariff is levied over and above the MFN duty. So before July 24, the US has to put in place a new tariff regime.
For that, the US is conducting two Section 301 investigations against a number of countries, including India. This is the only legal mechanism through which the US can impose new tariffs of any magnitude.
In March, the US Trade Representative (USTR) launched two unilateral Section 301 of the Trade Act of 1974 investigations against a number of countries, including India, over excess capacity and failures to eradicate forced labour in global supply chains.
On June 2, the USTR proposed imposing 12.5 per cent tariffs on 54 countries, including India, for allegedly failing to prohibit the import of goods produced with forced labour.
The measure remains a proposal and has not yet been finalised. Interested parties can submit requests to appear at hearings and summaries of testimony by June 22. The USTR is scheduled to hold hearings on July 7. The report of the second probe is awaited.
On February 20, the US Supreme Court ruled against US President Donald Trump's sweeping reciprocal tariffs, which were imposed under the 1977 International Emergency Economic Powers Act (IEEPA). India was facing a 50 per cent tariff. Because of the ruling, the US has to replace the sweeping reciprocal tariffs with temporary duties.
So, Trump announced 10 per cent tariffs on all countries for 150 days, starting February 24. On February 7, India and the US issued a joint statement finalising the contours or framework of the first phase of the BTA or an interim trade deal.
According to that framework, the US had agreed to reduce tariffs on India to 18 per cent from 50 per cent. It had removed the 25 per cent tariffs on Indian goods for buying Russian oil and was to cut the remaining 25 per cent to 18 per cent under the pact. But the US Supreme Court ruled against these tariffs.
As the tariff landscape changed in the US, both sides are relooking at the agreement's framework.
When the framework of the first phase of the bilateral trade agreement (BTA) was finalised, India had a comparative advantage over its competitor countries, such as ASEAN nations (Indonesia, Malaysia, Singapore, Thailand, Philippines, Brunei, Vietnam, Laos, Myanmar, Cambodia), Sri Lanka, Pakistan and Bangladesh.
Under the framework, the US had announced an 18 per cent tariff on Indian goods. At that time, tariffs on India's competing countries ranged from 19 to 20 per cent. But now, all countries face the same 10 per cent additional levy.The US was the second-largest trading partner of India in 2025-26.
India's outbound shipments to the US grew marginally by 0.92 per cent to USD 87.3 billion during the last fiscal year, while imports increased 15.95 per cent to USD 52.9 billion. The trade surplus declined to USD 34.4 billion in 2025-26 from USD 40.89 billion in 2024-25. With Agency Inputs)
Published by HT Digital Content Services with permission from Millennium Post.