India, US reach broad trade deal understanding but timing hinges on unfolding US tariff process
External Affairs Minister Jaishankar says India-US trade agreement is 'very, very far advanced,' but India must judge when to conclude it while Section 301 tariff reviews continue.
India and the United States have reached a broad understanding on a trade agreement, but changes in American tariff policy have complicated the decision on when to conclude it, External Affairs Minister S. Jaishankar said in New York on Monday. Speaking at the Asia Society during the UN General Assembly's high-level week, Jaishankar described the proposed agreement as 'very, very far advanced,' noting that its completion could help put the wider relationship on a better course after a difficult period.
The sticking point is not the substance of the deal itself but timing. Jaishankar said the question now is 'what has changed on the American side,' pointing specifically to the shift in the basis for US tariffs and to a Section 301 process that remains unfolding. India imposed a 10% additional tariff on Indian imports effective July 24, 2026, as part of a broader Section 301 investigation into forced-labour practices. Jaishankar said India must judge when to close an agreement negotiated over a long period while that process continues.
Jaishankar attributed the delay to structural economic differences between the two countries. Expectations of a quick deal had run up against the complexity of India's economy, which has many small farmers and manufacturers whose production structure differs sharply from that of the United States. He emphasized that trade negotiations require patience and detailed engagement.
Commerce Minister Piyush Goyal is scheduled to visit the US from September 29 to October 5 to attend a G20 meeting and hold discussions with US Trade Representative Jamieson Greer on advancing the bilateral trade talks. The two countries are members of the Quad alongside Australia and Japan.
How could this affect you
Traced by who's actually in the path of this — not everyone is.
Likely
Exporters of Indian goods to the US market
A finalized trade agreement could provide preferential market access and tariff relief, but the unresolved 10% Section 301 duty means export cost structures depend on timing and scope of the final deal. If the agreement excludes certain sectors or the tariff remains unresolved, landed costs could remain elevated.
Likely
US importers of Indian goods (textiles, agricultural products, pharmaceuticals)
A trade deal could lower costs through tariff reductions and preferential rules of origin, but the ongoing Section 301 process creates uncertainty about which products are covered and at what effective duty rate. Supply chain planning is constrained until the final agreement and any tariff carve-outs are known.
Possible
Indian small farmers and manufacturers targeting US exports
Complex product-level negotiations driven by India's large base of small producers mean any final agreement will likely include detailed rules of origin and sector-specific provisions. Small producers face higher compliance costs but could gain preferential access if the deal concludes.
Sources
Every claim here traces back to reporting you can read yourself.
