India will delay signing a trade deal with the United States until Washington finalises a new global tariff framework, following a recent US Supreme Court ruling that struck down reciprocal tariffs, a senior government official said.
The decision reflects India’s strategy to align any agreement with the new US tariff structure, while also addressing ongoing Section 301 investigations into Indian trade practices.
India waits for clarity on US tariff structure
India had earlier expected to finalise a trade agreement with the US in March. However, the Supreme Court ruling invalidating tariffs under the International Emergency Economic Powers Act (IEEPA) has changed the situation.
Officials said the earlier tariff regime no longer applies, making it necessary to reassess the basis of the trade deal.
“Any deal we sign must be aligned with the comparative tariff structure,” the official said.
Currently, the US has imposed a 10% global tariff under Section 122 provisions, which applies for a limited period to multiple countries.
Trade deal likely after new tariff architecture emerges
Washington is now working to rebuild a new global tariff architecture, and India prefers to wait until the framework becomes clearer.
The official said negotiations between the two countries are largely complete, but final signing may happen only after the tariff structure is redefined.
“The deal has broadly been finalised. Teams will now work on final details. Signing may happen once the new tariff system is in place,” the official said.
Section 301 investigations part of negotiations
India also wants the trade deal to address Section 301 investigations initiated by the United States.
Washington has recently issued notices under Section 301 to several economies, including India.
“These investigations take time. When the deal is finalised, it should also resolve these issues,” the official said.
Section 301 allows the US to investigate and respond to trade practices it considers unfair.
Global trade dynamics influencing negotiations
Officials said trade agreements depend heavily on the global competitive landscape, not just bilateral terms.
Countries evaluate tariff advantages relative to multiple trading partners before signing agreements.
“There is no stand-off. India is ready to proceed when the US is prepared,” the official said.
Countries recalibrating trade deals after US court ruling
The official noted that several countries are reassessing trade agreements with the US following the court decision.
Some countries had already signed agreements based on the earlier tariff regime. These deals may now need revision.
India, along with the European Union, falls into a group that has not yet signed legal agreements, allowing flexibility to adapt to the new tariff framework.
Market outlook
Analysts say the delay in the India-US trade deal reflects broader uncertainty in global trade policy.
A new US tariff framework could reshape international trade flows and influence export competitiveness.
Market participants will closely monitor developments in US tariff policy, as it could affect Indian exports, global supply chains and trade negotiations worldwide.
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