India, U.S. note ‘substantial progress’ on trade deal talks as U.S. Trade Representative Greer ends two-day visit to Delhi

The US Treasury Secretary's visit to India in June 2026 coincided with high-level trade talks between both countries' commerce and economic teams, with both ...

What Happened

The US Treasury Secretary's visit to India in June 2026 coincided with high-level trade talks between both countries' commerce and economic teams, with both sides reporting "substantial progress" on a proposed Bilateral Trade Agreement (BTA).
The talks reviewed key elements of a proposed interim trade arrangement, covering enhanced market access, digital trade, supply chain resilience, reduction of non-tariff barriers, and cooperation in strategic sectors.
The pressure to conclude an interim deal is driven by a July 24, 2026 deadline — the date on which the United States' temporary reduced tariff regime (currently 10%) is set to expire, after which higher reciprocal tariffs would apply.
Under the February 2026 framework agreement, the US had agreed to apply a reciprocal tariff of 18% on most Indian goods — lower than the 25% baseline faced by many competing exporters.
India's proposed commitments include eliminating or reducing tariffs on US industrial goods and select agricultural products (tree nuts, fresh and processed fruit, soybean oil, wine and spirits), and a pledge to purchase approximately USD 500 billion in US energy, aircraft, technology, and coking coal products over five years.
The US side sought resolution of long-standing non-tariff barriers — particularly in medical devices, import licensing for ICT products, and agricultural standards — as preconditions for removing the reciprocal tariff on pharmaceuticals, gems and diamonds, and aircraft parts.

Static Topic Bridges

India-US Bilateral Trade Agreement (BTA) Framework

The India-US BTA negotiation was formally launched on February 13, 2025, following a joint statement between the two governments. A framework interim agreement was reached in February 2026, setting the reciprocal tariff at 18% on originating Indian goods — a concession relative to the 25% baseline — and outlining commitments on market access, NTBs, and strategic sector cooperation. The BTA is distinct from earlier arrangements like the Generalised System of Preferences (GSP), which lapsed in 2019 and covered around USD 6.5 billion of Indian exports.

Bilateral merchandise trade between India and the US was approximately USD 120 billion (FY25).
The US is India's largest trading partner and export destination.
Key Indian export sectors: pharmaceuticals, gems and jewellery, IT services, textiles, engineering goods.
Key US export interests: defence equipment, energy, high-value agriculture, medical devices.

Connection to this news: The June 2026 ministerial discussions represent the latest round of finalising the interim arrangement before the July 24 tariff deadline, with the Treasury Secretary's visit adding economic-diplomatic weight to the negotiations.

Non-Tariff Barriers (NTBs) in India-US Trade

Non-tariff barriers are trade restrictions that use mechanisms other than import duties to control the quantity or cost of imports. In India-US trade, US concerns have historically centred on India's Quality Control Orders (QCOs), sanitary and phytosanitary standards for agricultural imports, import licensing requirements for ICT goods, and price controls on medical devices. These NTBs have been a persistent irritant even as tariff negotiations proceed.

India's average MFN (Most Favoured Nation) applied tariff rate is approximately 17.6% — among the higher rates in Asia.
The US has used the "reciprocal tariff" framework to link its own tariff concessions directly to India's removal of NTBs.
Quality Control Orders (QCOs) — mandatory BIS certification requirements — have been flagged by the US as restricting market access for goods including electronics and agricultural inputs.
The WTO's dispute settlement mechanism provides an independent forum, but both sides have preferred bilateral negotiations.

Connection to this news: Progress on NTB resolution is a stated US precondition for removing reciprocal tariffs on high-value Indian exports (generics, gems, aircraft parts), making NTBs a central issue in the current round of talks.

WTO's Most Favoured Nation (MFN) Principle and Preferential Trade Agreements

The MFN principle, enshrined in GATT Article I and WTO rules, requires member countries to extend to all trading partners the most favourable tariff treatment given to any one partner. Preferential or Free Trade Agreements (FTAs) are exceptions permitted under GATT Article XXIV, provided they cover "substantially all trade." The current India-US negotiations for a BTA would constitute such an FTA exception, allowing both sides to grant each other tariff rates lower than their MFN schedules.

India has operational FTAs with ASEAN, Japan, South Korea, UAE, and Australia (among others).
India does not yet have an FTA with the US — the current BTA would be the first comprehensive bilateral trade pact.
The US withdrawal from the Trans-Pacific Partnership (TPP) in 2017 has made bilateral deals the primary US trade negotiation vehicle.
MFN erosion is a 2026 concern: the US has struck bilateral tariff deals with several partners, creating a fragmented tariff landscape.

Connection to this news: The India-US BTA, if concluded, would be India's most significant preferential trade arrangement with a major Western economy, and would mark a departure from the MFN baseline that currently governs US-India trade.

Key Facts & Data

Bilateral merchandise trade (India-US, FY25): approximately USD 120 billion.
US reciprocal tariff on Indian goods under February 2026 framework: 18% (versus 25% baseline).
Temporary reduced US tariff (pre-deal): 10%, expiring July 24, 2026.
India pledged USD 500 billion in US product purchases over five years under the framework.
The BTA negotiation was formally launched February 13, 2025.
India's average MFN applied tariff: approximately 17.6%.
Key categories where the US seeks NTB resolution: medical devices, ICT import licensing, agricultural standards.
Categories where reciprocal tariffs could be removed upon deal conclusion: generic pharmaceuticals, gems and diamonds, aircraft parts.