NEW DELHI: Amid the widespread speculation of “uncertainty” over the proposed trade deal between India and the US, America has assured India of a “comparative tariff advantage” as the Washington administration continues to finalise its own tariff structures on trade. It is also learnt that a team of American trade negotiators were in India in the first week of November to move forward the discussions on the bilateral trade agreement (BTA) between the two countries, according to a top government source.
The source also confirmed that the US side has “assured a comparative tariff advantage” for Indian merchandise once the outcomes of investigations under Section 301 of the Trade Act of 1974 into structural excess capacity and production in manufacturing sectors are completed. “However, the final tariff structure remains linked to the outcome of Washington’s second investigation under Section 301,” the source added.
The fresh assurance of the US is, however, a key breakthrough in talks, as New Delhi and Washington continue to await the positive outcomes of the Section 301 investigation. The US had launched two investigations under the Trade Act of 1974 in March this year. One was on the use of forced labour in production chains, and the other (second) one was on excess capacity.
The second probe, launched by the Office of the US Trade Representative (USTR) in March, covers 60 economies, including India. It examines whether countries have effectively prohibited imports of goods produced using forced labour. It is also learnt that the ongoing prove may influence the tariff treatment offered to Indian exporters, making its findings an important factor in finalising the agreement.
India is seeking preferential treatment against competing manufacturing destinations, particularly in sectors such as textiles, where exporters face competition from countries across South and Southeast Asia. The assurance of a comparative advantage is significant for Indian manufacturers looking to strengthen their position in the American market. Services-related issues will also feature in the broader BTA, extending negotiations beyond merchandise trade. This is important for India, given its strong presence in information technology, professional services and other service exports.
Recently, commerce and industry minister Piyush Goyal confidently announced that the negotiations were smooth, but only a few issues remained unresolved. He also expressed confidence that India would secure highly favourable access to the US market. However, the key challenge now is translating the tariff assurance into binding terms. “Until the Section 301 investigation concludes, uncertainty over the final tariff framework remains a major variable for Indian exporters,” the source said.
Besides, the source also highlighted that the discussions earlier this month “resolved” a number of issues in the chapter relating to customs and trade facilitation in the first tranche of the bilateral trade deal. “As there are no plans for further physical rounds of negotiations at this point in time, but fresh decision between these two nations on BTA is subject to change,” the source said.
The US remains India’s largest export market. In the first seven months (April-October) of the 2026-2027 financial year, Indian merchandise exports to the US grew to $59.52 billion, from $51.99 billion during the same period in the last financial year, according to the latest data published by India’s commerce ministry
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: deccanchronicle.com
