India-US Trade Deal: What Are the Sticking Points Holding Up the Crucial Agreement?

India-US trade deal negotiations stall over tariffs, market access concerns, and trade imbalance despite ongoing high-level talks in New Delhi.

By Ajay Haldar

New Delhi, June 24: Efforts are underway to finalise a landmark interim trade agreement between India and the United States, with officials from both countries engaged in intensive negotiations. While both sides are eager to conclude the deal, several contentious issues continue to hinder progress. A recent intervention by a US senator has once again brought these challenges into focus.

US Senator Roger Marshall highlighted key obstacles in the ongoing talks, particularly concerns over market access for American goods in India and the sizeable trade imbalance between the two countries.

What Did the US Lawmaker Say?

Speaking at an event in Washington, Marshall said that although the United States remains enthusiastic about expanding bilateral trade, considerable work is still required before an agreement can be finalised.

"When it comes to trade agreements, there are challenges. Currently, there is a $50 billion trade imbalance between the two nations. This is an area that still needs to be addressed," he said.

India-US trade deal talks continue as tariff disputes and market access issues delay final agreement.

Referring to tariffs and access for American exporters, Marshall added: "For years, India has maintained high barriers and steep tariffs against American goods. The bottom line is: if you want us to buy products made by you, we expect you to open up trade for us as well."

Despite the concerns, the senator expressed optimism about the potential to increase US

exports to India.

Officials Hold Key Meetings in New Delhi

Marshall's remarks come as senior officials from both countries continue marathon discussions in New Delhi aimed at finalising the interim trade pact.

On Tuesday, US Trade Representative Jamieson Greer met Commerce and Industry Minister Piyush Goyal to discuss the framework for the interim agreement and the broader Bilateral Trade Agreement (BTA).

The US delegation also held talks with Finance Minister Nirmala Sitharaman. According to the US Embassy in India, Washington remains focused on securing a fair and reciprocal agreement that expands market access for American exporters while benefiting both economies. US Ambassador Sergio Gor also reaffirmed Washington's commitment to strengthening economic ties.

Earlier, on June 17, US President Donald Trump said the two countries were "very close" to finalising a trade deal. Piyush Goyal had similarly stated on June 5 that both sides were working towards resolving all outstanding issues, with the first phase of the BTA potentially

taking effect by the middle of next month.

Interim Agreement Framework Already in Place

On February 7, India and the United States announced a framework for an interim agreement.

Under the proposed arrangement, the US agreed to reduce tariffs on Indian goods from 50 per cent to 18 per cent. A separate 25 per cent tariff linked to imports of Russian oil was removed, while the remaining 25 per cent levy was also expected to be reduced to 18 per cent.

In return, India proposed eliminating or reducing tariffs on a wide range of US industrial goods, along with several food and agricultural products. New Delhi also indicated plans to purchase US energy products, aircraft and aircraft components, precious metals, technology products and coking coal worth up to $500 billion over the next five years.

Why the Negotiations Have Become More Complicated

The original framework was based on the US maintaining a 50 per cent tariff on Indian goods. However, developments in the American legal and policy landscape have altered the situation.

On February 20, the US Supreme Court ruled that the tariffs imposed by the Trump administration were unconstitutional. Days later, on February 24, the administration introduced a temporary 10 per cent tariff on imports from all countries under Section 122 of the Trade Act for 150 days. The measure is due to expire on July 24.

These changes have reshaped the tariff environment and added fresh complexity to the negotiations, making the current round of talks particularly significant for both countries.