Tariff Threat On One Side, Trade Breakthrough On The Other: Inside US-India Talks

At a time when Washington is proposing fresh tariffs on imports from dozens of countries, including India, trade negotiators from the two nations are simultaneously racing to complete what could become one of the most significant bilateral economic agreements in recent years.

The contrast is striking. While the Trump administration has unveiled plans for additional duties on imports from 60 economies under a forced-labour review, officials on both sides insist that broader trade discussions remain firmly on track.

According to Sergio Gor, US Ambassador to India and Special Presidential Envoy to South and Central Asia, the proposed US-India trade deal is now almost complete, with negotiators focused on resolving the final details.

“We are on the last 1 per cent. Ninety-nine per cent of this deal is in place. That last per cent we will figure out sooner than later,” Gor said at the Citi Annual India Conference in Mumbai on Wednesday.

Trade Talks Continue Despite Tariff Proposal

The optimism comes amid a fresh trade policy push from the Trump administration.

Earlier this week, the United States Trade Representative (USTR) proposed additional tariffs on imports from 60 economies, including India, following investigations under Section 301 of the US Trade Act of 1974. The review examined measures adopted by various countries to prevent imports allegedly linked to forced labour practices.

The proposal has raised concerns among exporters, particularly because products from India, China, Japan, South Korea, Brazil and Switzerland could face a higher 12.5 per cent levy if the measures are ultimately implemented.

However, New Delhi has sought to reassure businesses that discussions with Washington continue on multiple fronts.

The Commerce Ministry has said India remains actively engaged with the United States on the Section 301 proceedings while simultaneously pursuing a broader bilateral trade framework announced earlier this year.

Against that backdrop, this week’s negotiations in New Delhi have taken on added significance.

Final Round Of Negotiations Underway

Trade teams from both countries have been shuttling between Washington and New Delhi in recent weeks.

“Just this morning, before I flew out to Mumbai, I met with the trade team that is visiting us right now in New Delhi. Last week, they were in Washington DC. This week, we sent our team to New Delhi. Tomorrow, they are going to be meeting with Minister Goyal,” Gor said, reported Business Standard.

Commerce and Industry Minister Piyush Goyal is expected to meet US negotiators as both sides attempt to close the remaining gaps in the agreement.

According to Gor, the unresolved issues are largely technical.

“We are very hopeful about that last 1 per cent, and a lot of it is, frankly, technicalities. Part of it is about when something kicks in, and a lot of it is legal language. But we are hopeful that we will get there,” he said.

The comments suggest that the major commercial and strategic issues have already been substantially addressed.

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Why The Agreement Matters

The proposed trade framework builds on commitments outlined in the February 7 India-US joint statement, which laid out a roadmap for a reciprocal trade arrangement and broader Bilateral Trade Agreement (BTA) negotiations.

For India, the outcome could have implications across sectors including manufacturing, engineering goods, textiles, pharmaceuticals and technology services.

For the United States, the agreement forms part of a wider effort to recalibrate trade relationships while expanding opportunities for American businesses abroad.

The negotiations are also taking place as businesses seek greater certainty amid a rapidly changing global trade environment shaped by geopolitical tensions, supply-chain disruptions and rising protectionism.

India’s Negotiators Earn Rare Praise

Gor also pushed back against criticism that negotiations have moved slowly.

Pointing to the India-European Union trade agreement, which took nearly two decades to conclude, he argued that major trade deals inevitably require compromise and persistence.

“In these negotiations, each side has to give something, because that’s what defines a win-win situation. I will say, to India’s credit, you have incredible negotiators. One of the reasons this deal is tough is because, for many years, India held the line on so many items that the United States was not able to get through. That’s why it took 19 years for the European Union to crack that trade deal,” he said.

The remarks highlight India’s growing confidence in international trade negotiations as it seeks to balance market access with domestic economic priorities.

From Trade Partners To Strategic Partners

The trade agreement is only one element of a rapidly expanding relationship.

According to Gor, bilateral merchandise and services trade between India and the United States has increased from $20 billion to $220 billion over the past two decades, representing an eleven-fold expansion.

“My vision is to make the US-India relationship the defining strategic partnership of the 21st century and deliver tangible results for the people of both of our nations,” he said.

Increasingly, that relationship is being driven by technology, supply chains, innovation and strategic cooperation rather than traditional trade alone.

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Billions Of Dollars Flowing Into India

Gor highlighted several major investment commitments by American companies as evidence of growing confidence in India.

He cited Amazon’s planned $35 billion investment by 2030, Microsoft’s announced $17.5 billion commitment, including hyperscale cloud infrastructure projects, and Google’s recently unveiled $15 billion artificial intelligence hub.

The investments span cloud computing, digital infrastructure, artificial intelligence and advanced technologies, sectors expected to play a central role in India’s next phase of economic growth.

Critical Minerals, AI And Supply Chains

Beyond trade and investment, Washington and New Delhi are also expanding cooperation in strategic industries.

Gor revealed that the US-India Critical Minerals Framework was formally signed last week alongside US Secretary of State Marco Rubio and External Affairs Minister S Jaishankar.

“This is a massive milestone. It will help to ensure the foundational elements required to prevent technology and energy are available within trusted networks,” he said.

The agreement is expected to strengthen cooperation on critical minerals needed for clean energy, advanced manufacturing and emerging technologies.

Under the TRUST (Transforming Relationship Utilising Strategic Technologies) initiative launched by President Donald Trump and Prime Minister Narendra Modi in February 2025, the two countries have also committed to deeper collaboration in artificial intelligence and trusted supply chains.

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Trust Emerging As A Competitive Advantage

Gor suggested that India’s growing importance extends beyond economics.

American businesses increasingly want to know whether India can serve as a secure location for research, intellectual property and advanced technology development, he said.

He pointed to pharmaceuticals as an example of that trust.

“We currently import close to 40 per cent of our generic pharmaceuticals from India. That’s because we trust this place. That’s because we want to work with this place. That’s a massive life-saving ingredient to our country,” he said.

The coming days are likely to determine whether negotiators can resolve the remaining issues and formally conclude the agreement.

While proposed tariffs and Section 301 investigations have introduced fresh uncertainty into the relationship, both governments appear keen to ensure that those disputes do not derail broader economic engagement.

With officials describing the deal as 99 per cent complete, attention is now focused on whether the final one per cent can be bridged.

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