India has refused to sign a rushed interim trade deal with the United States, opting instead to hold out for more favourable terms. The talks stalled after
Washington reportedly failed to meet New Delhi's key demands on tariff concessions and assurances against future US levies, with India unwilling to compromise on sensitive sectors such as agriculture, according to a report by Reuters. The two nations failed to finalise an interim trade agreement during US Trade Representative Jamieson Greer's visit to New Delhi last month, despite expectations from both sides that a limited deal was within reach. According to the report, there was no consensus because Washington did not offer assurances on New Delhi's key demands: a tariff advantage over competitors such as China and no new US levies after the deal, said an Indian government official aware of the talks. "Our position is clear - we don't intend to rush into a deal that is not on favourable terms or compromise on red lines like ceding ground on agriculture," the official said.
US wanted quick trade concessions
Washington had hoped for quick trade concessions from a strategic partner as US President Donald Trump prepares new tariffs likely to come into effect later this month. But a day after talks with Greer, Union Minister Piyush Goyal said the US deal would not be implemented unless an advantage is ensured, indicating New Delhi's hardened position and lack of urgency despite the risk of higher tariffs.
Like most countries, the bulk of goods from India currently face a 10% US tariff. But the Trump administration is expected to introduce steeper tariffs later this month through probes into excess industrial capacity.
Washington has already proposed new tariffs of up to 12.5% on dozens of nations, including India, over allegations they failed to curb trade in goods made with forced labour. New Delhi has denied US charges of surplus capacity.
Moreover, rising exports, new trade deals with other countries and blocs and eased economic risks have strengthened India's hand, trade analysts said. In April-June, India's overall goods exports rose about 15% from a year earlier despite disruptions from the war on Iran, buoyed by pricier petroleum shipments, officials told Reuters.
Exports to Gulf countries have recovered to pre-war levels, rising to $5.3 billion in May from $2.62 billion in March as traders shifted to alternative shipping routes, while exports to the United States edged up to $17.29 billion during April and May.
India is also broadening access to other developed markets, with a UK free trade pact set to take effect this month, and an EU agreement expected by early next year.
New Delhi is also calculating that some US trade measures could face legal or political setbacks, another Indian official said, as per the report.
(With agency inputs)
