India is taking a measured approach to trade negotiations with the United States, choosing not to fast-track an interim agreement as the Narendra Modi government assesses that its negotiating position has improved due to stronger economic performance, broader trade opportunities and easing external pressures, News18 reported quoting government officials and analysts.
After months of talks, expectations had grown that an interim trade pact could be concluded during US Trade Representative Jamieson Greer’s visit to New Delhi last month. Those discussions, however, ended without a deal as both sides remained at odds over several key issues.
Reuters reported that India declined to sign an agreement that failed to accommodate its core demands, including preferential tariff treatment compared with competing exporters such as China and guarantees that the United States would not introduce additional tariffs after the pact was signed. Indian negotiators also maintained their position on shielding politically sensitive sectors, particularly agriculture.
“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," an Indian government official aware of the negotiations told Reuters.
According to the report, Washington had sought swift trade concessions from New Delhi before President Donald Trump's proposed tariff measures are scheduled to take effect later this month. Despite the prospect of higher duties on Indian exports, Indian officials have shown little inclination to accelerate the negotiations.
Commerce and Industry Minister Piyush Goyal reinforced that stance a day after Greer's visit, indicating that any agreement with the United States would proceed only if it delivered clear benefits for India.
At present, most Indian exports to the US are subject to a 10 per cent tariff. The Trump administration is expected to impose higher duties later this month through investigations into excess industrial capacity. Separately, Washington has proposed additional tariffs of up to 12.5 per cent on several countries, including India, over allegations involving goods produced with forced labour, accusations that New Delhi has rejected.
A US source familiar with the discussions told Reuters that “the US view has been that India needs to earn the preferential treatment on trade provisions it has sought by making its own concessions".
Although negotiations remain ongoing, officials on both sides suggested that an immediate breakthrough appears unlikely.
Speaking on condition of anonymity, a US official said Washington continued to expect an agreement but described India at times as being “slow, bureaucratic and difficult" during the negotiations.
White House spokesman Kush Desai, however, said: “The Trump administration continues to productively engage with Indian officials to finalise a historic trade deal that puts Americans and America First."
Trade experts believe New Delhi's leverage has increased significantly in recent months.
India's merchandise exports climbed about 15 per cent year-on-year during the April-June quarter despite disruptions linked to the Iran conflict, supported by stronger petroleum exports. Shipments to Gulf countries have returned to pre-war levels, while exports to the United States have also grown.
Meanwhile, India has broadened its trade prospects beyond the US. The India-UK free trade agreement is expected to take effect this month, and negotiations with the European Union on a separate trade pact continue to advance, with a possible conclusion early next year.
“Indian negotiators have gained some leverage in the talks, given its strong economy, diversification initiatives with other partners, and its strategic standing in the world," Wendy Cutler, senior vice-president at the Asia Society Policy Institute and a former US trade official, told Reuters.
India's economic outlook has also strengthened after the interim US-Iran peace agreement eased concerns over global oil prices.
Goldman Sachs has upgraded its forecast for India's economic growth in 2026 to 6.8 per cent while reducing its projections for inflation and the current account deficit, a shift that analysts say gives the government greater flexibility to wait for more favourable trade terms.
Officials and analysts also argue that New Delhi believes some of the Trump administration's proposed trade actions could encounter legal and political challenges within the United States.
A coalition of 22 Democratic state attorneys general has already mounted a legal challenge against the proposed tariffs connected to forced labour investigations.
At home, Prime Minister Narendra Modi's recent electoral successes have further bolstered the government's negotiating confidence. Leaders of the Bharatiya Janata Party have repeatedly maintained that any trade agreement must safeguard the interests of Indian farmers and small businesses.
“India realises that delaying, or even abandoning, a rushed deal may be more prudent than locking into obligations whose costs could far exceed any temporary tariff relief," Ajay Srivastava, founder of the Global Trade Research Initiative and a former trade negotiator, told Reuters.
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