'It's in last 1 or 2%': US envoy Sergio Gor declares India-US trade pact nears finish line

The US Ambassador to India declared the India-US Bilateral Trade Agreement (BTA) is in its final stages, with only around 1–2% of details remaining to be res...

What Happened

The US Ambassador to India declared the India-US Bilateral Trade Agreement (BTA) is in its final stages, with only around 1–2% of details remaining to be resolved.
The US Embassy in New Delhi facilitated $20.5 billion in new US investments in India during the current year, outpacing European counterparts in investment facilitation.
Both sides reaffirmed a "win-win" commitment to the agreement, covering trade in goods and services, with market access and digital trade among the remaining discussion points.
Negotiations carry urgency due to a temporary 10% US tariff regime under Section 122 of the Trade Act, with a key deadline approaching in late July 2026.
The relationship was described as strong across trade, defence, and people-to-people dimensions.

Static Topic Bridges

India-US Bilateral Trade Agreement (BTA) — Framework and Stakes

The India-US Bilateral Trade Agreement is a comprehensive trade pact under negotiation between the world's largest and fifth-largest economies (by nominal GDP). The February 2026 framework reduced the US reciprocal tariff on India from 25% to 18%, and the BTA aims to create deeper, rules-based market access across goods, services, digital trade, intellectual property, and non-tariff barriers. Both countries pledged under "Mission 500" to double bilateral trade to $500 billion by 2030.

India-US goods trade totalled $149.4 billion in 2025; combined goods and services trade reached approximately $241.5 billion.
The US goods trade deficit with India was $58.2 billion in 2025, up 27.1% from 2024.
The BTA may be notified as an "interim agreement" under Article XXIV.5 of GATT, which requires a defined timeline (typically within 10 years) for a comprehensive FTA.
Key negotiation areas include: market access for goods and services, digital trade, non-tariff barriers, intellectual property, labour and environment standards, and government procurement.

Connection to this news: The ambassador's statement that only 1–2% of the deal remains signals imminent closure, raising questions about compliance with WTO's Most Favoured Nation (MFN) principle and the broader implications for India's tariff schedule.

WTO Most Favoured Nation (MFN) Principle and Article XXIV

The Most Favoured Nation (MFN) principle is a foundational rule of the World Trade Organization (WTO) under GATT Article I, requiring that any trade advantage, favour, or privilege granted to one WTO member must be extended to all others. Bilateral preferential trade agreements are permitted as an exception under Article XXIV of GATT, provided they cover "substantially all trade" between parties and do not raise barriers to third-country trade.

India is committed to MFN treatment under its WTO membership obligations.
If India reduces tariffs for the US under the BTA without extending similar reductions to all WTO members, it must invoke the Article XXIV exception and ensure the agreement meets the "substantially all trade" threshold.
Critics argue that the BTA risks undermining the multilateral trading system if it memorialises tariff rates above US WTO-bound levels.
India currently gives MFN status to all WTO members except Pakistan (suspended in February 2019 after the Pulwama attack).

Connection to this news: The near-finalisation of the BTA brings into focus its WTO compatibility, especially since the agreement involves sector-specific tariff reductions that may need to be extended multilaterally or legally justified under Article XXIV.

Section 122 of the US Trade Act and Reciprocal Tariff Regime

Section 122 of the US Trade Act of 1974 grants the US President authority to impose temporary tariffs of up to 15% for up to 150 days on imports from countries with which the US has a "large and serious" balance of payments deficit. This provision differs from Section 301 (unfair trade practices) and Section 232 (national security) tariffs.

The current 10% US tariff under Section 122 applies to all countries, creating a time-bound window for bilateral deal closure.
The July 2026 deadline creates urgency, as expiry or renewal of this tariff regime would significantly alter the negotiating context.
India had previously faced 25% reciprocal tariffs before the February 2026 framework reduced them to 18%.

Connection to this news: The ambassador's declaration of final-stage completion is directly tied to the Section 122 deadline, as closing the BTA before this window closes would lock in favourable tariff terms for India.

Key Facts & Data

India-US total goods and services trade: approximately $241.5 billion (2025)
US goods trade deficit with India: $58.2 billion (2025)
"Mission 500" target: $500 billion in bilateral trade by 2030
India-US BTA framework established: February 2026 (reduced reciprocal tariff from 25% to 18%)
Current US tariff on India under Section 122: 10% (temporary, ~150 days)
US investments facilitated by US Embassy New Delhi in 2026: $20.5 billion
India's WTO MFN suspension: applies only to Pakistan (since February 2019)
WTO Article XXIV.5: permits preferential trade agreements as exception to MFN, if covering "substantially all trade"
India is ranked as the US's 10th largest trading partner overall