India-US trade deal ‘more or less’ finalised, framework for preferential access being worked out: Commerce Secretary Rajesh Agarwal
The Commerce Secretary stated that the India-US trade deal is "more or less" finalised, with a framework for preferential market access still being worked out before signing at an appropriate time.
The core sticking point is architectural: India applies Most Favoured Nation (MFN) tariffs uniformly to WTO members, while the US applies country-specific "executive" tariffs, so a mechanism is needed to give India differential, preferential access without breaching either side's trade framework.
India's Comprehensive Economic Partnership Agreement (CEPA) negotiations with Chile are in their final stages, driven partly by India's interest in securing access to Chile's lithium and other critical mineral reserves.
The India-New Zealand Free Trade Agreement, signed in April 2026, is expected to enter into force around October 2026 once New Zealand's Parliament completes domestic ratification.
Separately, the government highlighted plans to cut logistics/freight costs for exporters and to scale India's fintech and Digital Public Infrastructure (DPI) exports, especially UPI-style systems, to Global South markets.
Most Favoured Nation (MFN) Principle and WTO Trade Architecture
MFN is the foundational non-discrimination rule of the multilateral trading system, codified as Article I of the General Agreement on Tariffs and Trade (GATT), 1947 — now administered by the World Trade Organization (WTO), established 1995, headquartered in Geneva. It requires a WTO member to extend the same tariff/trade advantage granted to any one trading partner to all other WTO members immediately and unconditionally, subject to exceptions like FTAs (GATT Article XXIV) and special treatment for developing countries under the 1979 Enabling Clause.
Key Details
- GATT Article I:1 covers tariffs, import/export regulations, and internal taxes on like products.
- India has historically applied MFN-based tariffs uniformly across WTO members, departing from MFN only through negotiated FTAs/CEPAs.
- The Enabling Clause (1979) permits preferential, non-reciprocal treatment for developing countries without violating MFN.
The India-US trade deal's core technical challenge is reconciling India's MFN-based tariff structure with the US's country-specific "executive" tariffs — the two systems need a bespoke bilateral architecture to create legally coherent preferential access outside a formal FTA, since the US does not currently have an India-specific free trade pact.
CEPA vs FTA: India's Trade Agreement Taxonomy
A Free Trade Agreement (FTA) primarily eliminates or reduces tariffs on goods trade between two or more countries. A Comprehensive Economic Partnership Agreement (CEPA) is a deeper, broader instrument that, alongside goods, covers services, investment, intellectual property rights, government procurement, and regulatory cooperation. India uses CEPA terminology for its more comprehensive pacts (e.g., India-UAE CEPA, 2022; India-Australia ECTA, 2022, upgrading toward CECA).
Key Details
- India-UAE CEPA (2022) was India's first major post-2010 comprehensive trade pact and a template for subsequent deals.
- The India-Chile pact under negotiation is evolving into a CEPA covering critical minerals, manufacturing, defence, and space-sector linkages, not just tariff cuts.
- Chile holds some of the world's largest lithium reserves, making the deal strategically linked to India's critical mineral security for EV batteries and clean energy.
The India-Chile negotiations being described as in their "final stages" reflect India's broader 2020s strategy of pursuing CEPA-type deep agreements with resource-rich and strategically located economies (UAE, Australia, EU negotiations, and now Chile) rather than narrow tariff-only FTAs.
India-New Zealand FTA and Trade Agreement Ratification Process
The India-New Zealand FTA was signed in April 2026 after negotiations concluded in December 2025. Under India's treaty practice, a signed trade agreement requires domestic legislative/procedural steps in both countries before entering into force — in New Zealand's case, parliamentary examination and any implementing legislation.
Key Details
- The agreement provides for elimination of duties on 100% of India's exports to New Zealand.
- New Zealand has committed an estimated USD 20 billion in investment into India over 15 years under the pact.
- The two countries aim to double bilateral trade to NZD 7 billion by 2030.
- The FTA is expected to enter into force around October 2026, ahead of New Zealand's general election.
The Commerce Secretary's reference to the New Zealand FTA "becoming active soon" reflects the gap between signing (April 2026) and entry into force (expected October 2026) — a distinction UPSC frequently tests: signing/conclusion of negotiations does not equal legal enforceability.
Digital Public Infrastructure (DPI) and Fintech Exports
Digital Public Infrastructure refers to foundational, interoperable digital systems — identity (Aadhaar), payments (UPI), and data-sharing frameworks — built as public goods that private and public actors build services upon. India has positioned its DPI stack (the "India Stack") as an exportable model, particularly to Global South economies in Asia, Africa, and Latin America.
Key Details
- India has signed DPI cooperation MoUs with roughly 23 countries.
- India's current fintech services exports stand at approximately USD 8 billion annually; officials have floated a target of USD 60-80 billion if India captures around 10% of global fintech services trade.
- UPI has been extended to or is live in several countries including UAE, Singapore, France, Sri Lanka, and Mauritius, among others, as part of India's DPI diplomacy.
The push to internationalise fintech/DPI exports was raised at the Global Fintech Fest 2026 alongside the trade-deal remarks, reflecting a coordinated commerce diplomacy strategy — pairing traditional goods-trade FTAs (US, Chile, New Zealand) with services/digital-trade expansion into the Global South.
- India's fintech services exports: approximately USD 8 billion currently; potential target USD 60-80 billion at ~10% global market share.
- India's total merchandise exports: approximately USD 863 billion; imports exceed USD 1 trillion (as cited by the Commerce Secretary).
- India receives more than USD 125 billion in annual remittances.
- India-New Zealand FTA: signed April 2026; expected to enter into force around October 2026; eliminates duties on 100% of Indian exports to New Zealand; NZD 7 billion trade target by 2030; USD 20 billion NZ investment commitment over 15 years.
- India-Chile CEPA: under negotiation since May 2025, in final stages as of September 2026, centred on critical minerals (lithium) access.
- MFN principle: GATT Article I (1947); WTO established 1995, HQ Geneva.