India-US trade pact to 'unleash another level' of ties, says American official; reveals deal is '90%-plus' done
A senior US State Department official stated that the India-US trade pact is "90 per cent-plus" complete, with only the final issues remaining to be resolved.
The official described trade as historically the most difficult area in the bilateral relationship and said a completed deal could "unleash another level" of India-US ties.
The statement was made ahead of the US Secretary of State's planned visit to India in October 2026 and the next Quad Foreign Ministers' meeting, which officials described as the third such meeting in 2026 and called an "unprecedented" pace of engagement.
On the Indian side, the Commerce and Industry Ministry has said the broad contours of the pact are settled, with implementation contingent on securing competitive market-access terms relative to other exporting countries.
The current negotiations build on an interim trade framework announced in February 2026, and are aimed at finalising a full Bilateral Trade Agreement (BTA).
From Interim Framework to a Bilateral Trade Agreement (BTA)
India and the US are negotiating in stages: first an interim framework agreement, then a comprehensive Bilateral Trade Agreement. This is distinct from a Free Trade Agreement (FTA) or a Comprehensive Economic Partnership Agreement (CEPA), which typically cover goods, services, investment and often intellectual property in a single ratified treaty text.
Key Details
- The India-US interim framework was announced on February 6-7, 2026, via a joint statement, alongside a US executive order removing an additional 25% "reciprocal" ad valorem tariff that had been imposed on Indian goods.
- Under the interim framework, the effective US tariff on Indian goods was set at a baseline of around 18%, with select goods at zero, in exchange for India's commitments to reduce Russian oil imports and expand defence cooperation with the US.
- India committed to eliminating or lowering tariffs on US industrial goods and a range of US food and agricultural products, and both sides agreed to expand trade in technology goods such as GPUs and data-centre hardware.
- For comparison, the India-UAE Comprehensive Economic Partnership Agreement (CEPA) — signed February 2022, in force from May 1, 2022 — was negotiated and ratified as a single, complete treaty rather than a staged interim-then-full process; the India-US track is unusual in first locking in a partial framework before completing full BTA text.
The "90 per cent-plus done" description refers to progress on the full BTA text that is meant to supersede or elaborate on the February 2026 interim framework; the remaining 10% concerns issues not yet resolved even after the tariff and market-access commitments already in effect.
WTO Rules and Bilateral Deals: The MFN Exception
Under World Trade Organization law, the Most Favoured Nation (MFN) principle (GATT Article I) normally requires that any tariff concession given to one trading partner be extended to all WTO members. Bilateral/regional trade agreements are a recognised exception.
Key Details
- GATT Article XXIV permits customs unions and free trade areas as exceptions to the MFN obligation, provided they meet substantial coverage requirements.
- India has used this exception route for its FTAs/CEPAs with ASEAN, Japan, South Korea, UAE and Australia (ECTA, 2022); a comprehensive India-US BTA would similarly need to be structured to fit within this WTO exception framework.
- Interim or partial tariff arrangements (like the February 2026 US tariff reduction) that are not full FTAs still raise MFN-consistency questions, which is one reason both sides continue working toward a complete, WTO-compatible BTA text.
The push to finalise a full BTA (rather than rely indefinitely on an interim executive-order-based tariff arrangement) is partly about giving the deal a durable, rules-based trade-agreement structure.
The Quad — Institutional Framework for the India-US Relationship's Strategic Track
The Quadrilateral Security Dialogue (Quad) groups India, the United States, Japan and Australia. Trade friction and strategic cooperation are often discussed as parallel tracks, and the reference to an upcoming Quad Foreign Ministers' meeting situates the trade talks within the broader India-US-led Indo-Pacific engagement.
Key Details
- The Quad originated in 2007 (an initiative associated with Japan) after the 2004 Indian Ocean tsunami relief coordination, went dormant, and was revived at the official level in 2017.
- It functions through Leaders' Summits and Foreign Ministers' Meetings rather than a treaty-based secretariat; it has no charter or standing headquarters.
- The Quad's stated focus areas include maritime security, supply-chain resilience, critical and emerging technology, and infrastructure — trade and technology cooperation (including semiconductors and critical minerals) are recurring Quad themes distinct from, but related to, bilateral trade negotiations.
The description of the upcoming Quad Foreign Ministers' meeting as the third in 2026 signals an intensified diplomatic calendar around the same period as the trade pact's expected conclusion, linking the economic and strategic tracks of the relationship.
- India-US interim trade framework announced: February 6-7, 2026
- Additional US "reciprocal" tariff removed: 25 percentage points
- Resulting effective US tariff baseline on Indian goods: approximately 18% (select goods at zero)
- India's linked commitments: reducing Russian oil imports, expanding defence cooperation with the US
- US official's description of BTA completion: "90 per cent-plus" done as of September 2026
- US Secretary of State's visit to India: planned for October 2026
- Upcoming Quad Foreign Ministers' meeting: third such meeting in 2026
- Comparable precedent: India-UAE CEPA signed February 2022, in force May 1, 2022
- Quad members: India, United States, Japan, Australia; revived at official level in 2017