India-US trade deal ‘done and dusted’, execution awaits competitive advantage: Goyal
The India-US bilateral trade agreement was described as being at an advanced stage of finalisation, with the framework for its first phase having been announced in February 2026.
Subsequent changes in United States tariff policy required additional rounds of negotiation before the agreement could be executed.
The remaining issue in the negotiations concerns securing a comparable competitive tariff advantage for Indian exports relative to competing countries in the US market.
A bilateral meeting between Indian and US trade representatives is scheduled during the G20 Trade Ministerial (30 September-1 October 2026) to advance the negotiations.
Progress was also reported on separate trade negotiations with the European Union (agricultural protections, additional steel quotas, and climate finance commitments), Canada (fast-progressing talks), Mexico (Terms of Reference finalised), the Gulf Cooperation Council (first round of negotiations scheduled for October 2026), and continuing engagement with Chile and Peru.
Types of Trade Agreements — FTA, CEPA/CECA, and Interim Agreements
Trade agreements are classified by scope and depth: a Free Trade Agreement (FTA) typically covers trade in goods with tariff elimination/reduction; a Comprehensive Economic Cooperation/Partnership Agreement (CECA/CEPA) additionally covers services, investment, intellectual property, and other regulatory areas; an "interim" or "early harvest" agreement liberalises a limited set of tariff lines pending a fuller agreement.
Key Details
- India-UAE CEPA (signed 18 February 2022, operationalised 1 May 2022) — India's first CEPA with a Gulf country, covering goods and services with the aim of raising bilateral non-oil trade to USD 100 billion within five years
- India-Australia Economic Cooperation and Trade Agreement (ECTA, signed 2 April 2022, entered into force 29 December 2022) — an interim agreement, described as building toward a more comprehensive CECA
- India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA, signed 10 March 2024, entered into force 1 October 2025) — includes a $100 billion investment commitment from EFTA states over 15 years
- A Memorandum of Understanding (MoU) is distinct from all of these — it is a non-binding statement of intent, unlike a treaty-level trade agreement
The India-US deal is being negotiated as a phased/interim arrangement (a "first phase" framework), consistent with how India has structured recent trade deals — sequencing an interim tariff agreement (as with Australia) before, or in place of, a full CECA.
WTO Most-Favoured-Nation (MFN) Principle and the FTA Exception
The Most-Favoured-Nation principle under the World Trade Organization (WTO) requires that any trade advantage a member grants to one trading partner be extended to all WTO members. Article XXIV of the General Agreement on Tariffs and Trade (GATT) provides an explicit exception, permitting customs unions and free trade areas to grant preferential treatment exclusively to their members without breaching the MFN obligation, provided certain conditions are met.
Key Details
- Bilateral/regional FTAs (such as the India-US deal under negotiation) are legal exceptions to MFN precisely because of the GATT Article XXIV carve-out
- FTA parties must notify the WTO of the agreement, which is then subject to review by other WTO members
- Parties to an FTA cannot raise trade barriers against non-member (third) countries beyond pre-existing levels as a result of forming the FTA
- India's tariff negotiations with the US, EU, and GCC are all separately notifiable preferential arrangements under this framework, not violations of MFN
The "competitive advantage" India is seeking from the US — preferential tariff treatment not available to competing exporting countries — is only possible because bilateral FTAs are a recognised exception to the WTO's non-discrimination rule.
India's Expanding FTA Network
India has been rapidly expanding its network of bilateral and regional trade agreements to secure preferential market access amid global tariff uncertainty.
Key Details
- India's existing FTA network (including agreements with ASEAN, Japan, South Korea, Mauritius, UAE, Australia, and EFTA) provides preferential access to markets accounting for an estimated 75% of global GDP
- Negotiations are simultaneously underway with the US, the European Union, Canada, Mexico, the Gulf Cooperation Council, Chile, and Peru
- The Gulf Cooperation Council (GCC) — comprising Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, and Oman — is a distinct multilateral bloc from bilateral deals India already has with individual Gulf states such as the UAE
The India-US negotiation is one strand of this larger, simultaneous FTA expansion strategy, which aims to diversify India's preferential trade access beyond any single partner as global tariff conditions shift.
G20 as the Negotiating Venue
The Group of Twenty (G20) is an intergovernmental forum of the world's major economies, established in 1999 in response to the Asian financial crisis, later elevated to a leaders' summit level from 2008. It has since developed sectoral ministerial tracks, including trade, which have met since 2012.
Key Details
- G20 membership: 19 countries + the European Union + the African Union (admitted as a full member at the 2023 New Delhi Summit, held under India's G20 presidency)
- The G20 Trade Ministerial is a sectoral track distinct from the annual Leaders' Summit, used for ministerial-level bilateral meetings on the margins
- India held the G20 presidency in 2023; the presidency rotates annually among member states
The scheduled bilateral meeting between Indian and US trade representatives is taking place on the margins of the G20 Trade Ministerial, illustrating how multilateral summits are routinely used as venues for parallel bilateral trade negotiations.
- India-US trade deal: framework for "first phase" announced February 2026; execution pending as of September 2026
- G20 Trade Ministerial (2026): 30 September-1 October
- India-UAE CEPA: signed 18 February 2022, in force 1 May 2022 — target of USD 100 billion non-oil bilateral trade in 5 years
- India-Australia ECTA: signed 2 April 2022, in force 29 December 2022 (interim agreement)
- India-EFTA TEPA: signed 10 March 2024, in force 1 October 2025 — USD 100 billion EFTA investment commitment over 15 years
- India's FTA network covers markets representing an estimated 75% of global GDP
- GATT Article XXIV: WTO legal basis permitting FTAs/customs unions as an exception to the MFN principle
- G20 established: 1999; African Union admitted as full member: 2023 (New Delhi Summit, India's presidency)