India-US trade deal 90 per cent complete, final details being worked out: US official
A senior US State Department official stated that the India-US trade deal is around 90% complete, with final details being negotiated
Remaining discussions are focused on competitive market access as both sides work to conclude the Bilateral Trade Agreement (BTA)
The announcement builds on the interim trade framework announced in February 2026, which had already reduced tariffs and secured trade-volume commitments
The deal is expected to substantially expand the India-US economic relationship once finalised
The February 2026 India-US Interim Trade Framework
On 6 February 2026, India and the US issued a joint statement establishing a framework for an interim trade agreement, intended as a precursor to a full Bilateral Trade Agreement (BTA). It immediately removed a punitive 25% tariff on Indian goods and reduced the US "reciprocal" tariff on Indian goods from 25% to 18%.
Key Details
- India committed to a USD 500 billion purchase commitment from the US over five years, alongside reciprocal tariff cuts on select US industrial and agricultural products
- The tariff relief followed India's commitment to halt Russian crude oil purchases and expand defence cooperation with the US
- The punitive tariff removal took effect via executive order from 7 February 2026
The "90% complete" status refers to the graduation of this interim framework into the full BTA — the remaining 10% covers market-access issues left unresolved in February.
Escalation and De-escalation of US Tariffs on Indian Goods (2025-26)
In August 2025, the US imposed an additional 25% penalty tariff on India linked to its continued purchases of Russian oil, taking total US tariffs on Indian goods to 50% — among the highest imposed on any US trading partner at the time. This was rolled back as part of the February 2026 interim deal.
Key Details
- The 50% tariff rate took effect on 27 August 2025, combining a baseline "reciprocal" tariff with the Russian-oil-linked penalty
- The February 2026 executive order eliminated the 25% penalty tariff effective 7 February 2026 and cut the reciprocal component to 18%
The trade deal now being finalised formalises this tariff de-escalation into a durable bilateral agreement rather than leaving it as an executive-order-based interim arrangement.
Most-Favoured-Nation (MFN) Principle and Bilateral Trade Agreements under WTO Law
Article I of GATT 1994 requires WTO members to extend any trade advantage granted to one member to all other members (MFN treatment), with a permitted exception for free trade agreements meeting GATT Article XXIV conditions — they must substantially cover trade between the parties and not raise barriers against third countries.
Key Details
- A "Bilateral Trade Agreement" of the kind India and the US are negotiating must be structured to fit within a recognised WTO exception, since neither is part of a shared regional trade bloc with the other
- India currently has no comprehensive FTA with the US, making this BTA a new category of arrangement in India-US trade relations
The structure and depth of market-access commitments in the BTA — rather than an ad hoc tariff truce — will determine whether it can be defended as WTO-consistent once concluded.
Comparison with India's Other Recent Trade Agreements — India-UK CETA
The India-UK Comprehensive Economic and Trade Agreement (CETA) was finalised on 6 May 2025, signed on 24 July 2025, and enters into force on 15 July 2026 — giving India a recent template for a comprehensive bilateral deal with a major developed-country partner.
Key Details
- CETA covers 29 chapters spanning goods, services, technology and mobility
- It makes 99% of Indian goods entering the UK, and 90% of UK goods entering India, duty-free or tariff-reduced, phased in over time
The India-US BTA is being negotiated in a narrower, more transactional form — focused on tariff relief and purchase commitments — compared to the broader chapter coverage of CETA, reflecting the different starting points of the two negotiations.
- India-US trade deal reported completion: ~90% (per a US State Department official)
- Interim framework announced: 6 February 2026; punitive tariff removed effective 7 February 2026
- US reciprocal tariff on Indian goods reduced from a peak of 50% (August 2025) to 18%
- India's purchase commitment under the interim framework: USD 500 billion over five years
- India-UK CETA (for comparison): signed 24 July 2025, in force 15 July 2026, 99%/90% tariff-line coverage