India-US Trade Deal Nears Finish Line, Final 1% Hurdle Remains: Piyush Goyal

India and the United States are close to finalising a bilateral trade agreement, but the last unresolved issue is central to New Delhi’s negotiating position: India wants a clear competitive advantage over rival exporters in the American market.

Union Commerce Minister Piyush Goyal has described the proposed pact as “very fair” and “equitable”, while saying the remaining gap is now linked to how Washington can legally deliver that preference, NDTV reported.

Speaking at The IndoJapan Strategic Dialogue - Shaping the Asian Century, Goyal said most elements of the agreement, including tariff concessions and work on non-tariff barriers, have been broadly settled. The final difficulty, according to him, is not the broader architecture of the pact but the legal mechanism the United States can use to give India better access than competing economies. That issue, he indicated, makes up the last “1 per cent” of the negotiations.

Why the final 1 per cent matters in the India-US trade agreement

The Union Minister said free trade agreements are fundamentally about preferential access. For India, the value of a deal with the United States depends on whether Indian exporters gain an edge over competitors in neighbouring countries and Southeast Asia, as well as other major exporting economies.

“It's a very fair, very equitable [deal]. It's a deal that gives us preferential access to the United States market, and free trade agreements are all about preferential access,” Goyal said. He added that countries including the European Union, the United Kingdom, Switzerland, Japan and South Korea also evaluate trade arrangements through the lens of relative competitiveness.

The minister linked the unresolved issue to the United States’ need to identify a legally sustainable way to extend that advantage. He said that after IEEPA-related tariffs were struck down by the Supreme Court, Washington had to find a mechanism that could withstand legal scrutiny while still giving India a comparative edge over its peers.

“Till they give us this competitive advantage, it's very difficult to enter into force any agreement, and that's a position that the US also appreciates and understands,” Goyal said. He added that the remaining work is on how the US can provide India such an advantage in practical and legally tenable terms.

What has already been settled

Negotiations for a comprehensive bilateral trade agreement began in February 2025. Both sides have since been working on an interim framework while keeping the wider agreement in view. The talks cover market access, tariff concessions, non-tariff barriers and other trade facilitation measures that affect exporters and importers on both sides.

A year of escalating diplomatic and economic friction between Indian Prime Minister Narendra Modi and US President Donald Trump culminated in the release of an interim trade framework. However, the leverage has been abruptly upended by a US Supreme Court ruling that stripped Washington of its primary leverage just days after the announcement.

The relationship between the two leaders has faced consecutive hurdles since they first initiated trade negotiations in February 2025. Relations initially soured in May 2025 after President Trump claimed he had personally brokered a peace deal between India and Pakistan following the Pahalgam attack in India-administered Kashmir. The dispute intensified in August when the Trump administration retaliated against New Delhi's ongoing purchases of Russian oil by doubling duties on select Indian exports, stacking a punitive 25 per cent extra duty on top of an existing 25 per cent reciprocal tariff.

In February 2026, exactly one year after talks began, both nations released a framework for an interim deal aimed at reaffirming their commitment to a broader US-India Bilateral Trade Agreement. Under the terms of the compromise, India agreed to eliminate or reduce tariffs on all US industrial products and a wide range of American food and agricultural goods, alongside a commitment to purchase roughly $500 billion (€438 billion) in US goods over the next five years. In return, the United States agreed to lower its baseline tariffs from 25 per cent down to 18 per cent and rescind the punitive extra tariff previously imposed over the Russian oil purchases.

Goyal downplays stress in negotiations

Goyal also sought to dispel the impression that the negotiations had been tense. Asked whether there had been any “nightmare” during the process, he described the talks as “a joyous and very learning experience” and said the only difficult part was managing the time difference between New Delhi and Washington.

“The only nightmare part of it is that the time difference is such that at times we have to stay awake at night,” he said. Goyal added that late-night discussions were harder on his staff and negotiating team, though he personally sleeps late and did not find it especially difficult.

The minister said both negotiating teams maintained a strong working relationship throughout the process. “I don't think there was any stress at any point in time,” he said, adding that he had “fabulous relations” with his US counterparts.

The agreement is now at a stage where political intent appears clear, but the legal route remains decisive. If Washington can provide the competitive preference India is seeking, both sides could move from negotiation to implementation. Until then, the pact remains close to completion but not yet ready to enter into force.