Business & Economy
India-US trade pact first phase enters legal drafting
Exporters may gain steadier US access, but terms remain unsettled.
Exporters may gain steadier US access, but terms remain unsettled.
India and the United States have finalised the first phase of a , but it is not yet a signed or active agreement. The move follows Narendra Modi and Donald Trump’s February 2025 decision to pursue a deal aimed at lifting to $500 billion by 2030. A February 2026 reportedly cut US tariffs on most Indian goods to 18%, helping products such as textiles, footwear, chemicals, home décor and some machinery compete in the US market. India is also seeking and more stable tariff rules, which would help exporters price goods and plan investment. 5
Legal drafting must still settle product coverage, tariff terms, and enforcement. Goyal said implementation depends on India gaining a competitive position against peer countries, so finalisation at the negotiating level does not guarantee immediate benefits. Indian exporters could gain, while US firms may win better access to India and protected Indian sectors may face stronger competition or pressure to concede. No signing or implementation date has been confirmed, and could still change the details. 1
Officials said legal drafting was underway and expressed hope for an early signing, but no confirmed signing or implementation date had been announced. The next formal tests are completion of , approval of the final text, formal signature, and publication of the tariff and needed to make the first phase effective.
The drafting stage must convert the political and negotiating understandings into enforceable language. It can still determine precise tariff commitments, covered products, , , , timelines, and how the first phase relates to the wider agreement.
Goyal said the pact would be once India secured a comparable or over peer countries. The condition means negotiation-level finalisation does not automatically trigger implementation, because India’s relative tariff position and competitive treatment must still be assessed.
Commerce Minister Piyush Goyal announced that the first phase, or , of the India-US trade pact had been finalised and was moving through . Trade Secretary Rajesh Agrawal said the negotiations were progressing toward an early conclusion and signing, but the announcement was not itself a signed or operational agreement.
The framework could benefit Indian exporters in sectors including textiles, apparel, leather, footwear, chemicals, plastics, rubber, home decor, , and some machinery. The extent of any in India would depend on the final market-access terms.
The two governments announced an while reaffirming negotiations on the broader agreement. The reported arrangement would reduce the US tariff on most Indian goods to 18 percent, covering products including textiles, apparel, leather, footwear, chemicals, home decor, and selected machinery. Further negotiations were still required to complete the pact.
India pursued not only lower but also more predictable for exporters. Stable terms would help businesses price goods, negotiate supply contracts, and plan investment, while the final agreement still had to define the scope and duration of those commitments.
The interim framework and continuing negotiations focused on additional market-access commitments for Indian exporters. could improve the position of Indian goods in the US market, especially in such as textiles, apparel, leather, footwear, and artisanal products. The final and remained unsettled.
India and the United States established a negotiating roadmap for a multi-sector Bilateral Trade Agreement. The framework identified increased , lower tariff and non-, and additional long-term commitments as central objectives.
Prime Minister Narendra Modi and President Donald Trump agreed to pursue a and set a goal of raising two-way trade to $500 billion by 2030. The proposed deal was intended to expand market access, reduce tariff and , and strengthen .