India To Sign U.S. Trade Deal After Washington Finalises New Tariff Structure

India will sign the proposed bilateral trade agreement with the United States only after Washington introduces a new tariff framework, Commerce Secretary Rajesh Agrawal said on March 16.

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Speaking during a press briefing, Agrawal said the agreement is still being finalised and will be signed once the U.S. government completes work on its revised tariff structure. The change follows a ruling by the Supreme Court of the United States earlier this year that struck down the executive authority previously used by Donald Trump to impose tariffs.

“We are still working on the finer details of the deal, but any signing will happen only after their new tariff architecture is ready. There is no stand-off on the deal,” Agrawal said.

Court Ruling Delays Trade Deal Timeline

According to the commerce ministry, the agreement was initially expected to be signed in March. However, the court ruling invalidated the earlier tariff measures that had formed the basis of ongoing negotiations.

The U.S. administration is currently drafting a revised tariff structure to replace the previous system. In the interim period, duties are being imposed under Section 122 of U.S. trade law, which allows temporary tariff measures for a limited period.

Agrawal said these temporary tariffs will remain in place for about five months while Washington prepares a permanent framework. The new tariff architecture will determine the structure under which the bilateral trade agreement will be finalised.

West Asia Conflict Affecting Trade Flows

The commerce secretary also said the ongoing conflict involving Iran, Israel, and the U.S. could affect India’s trade with countries in West Asia due to logistical disruptions.

According to Agrawal, shipping movements have been affected in the region, creating operational challenges for exporters. Air cargo routes are also experiencing delays, which could temporarily affect trade flows.

“There are logistical challenges, especially in the movement of ships. Air cargo is also facing certain issues, so it will impact Indian exports to the region, and imports will also be affected,” he said.

However, Agrawal noted that the impact on overall trade volumes is expected to remain limited as diplomatic engagement between countries continues to ensure the movement of goods.

Government Reviewing Export Support Measures

The government is examining support measures for exporters sending goods to West Asia, Agrawal said. Steps to assist exporters affected by shipping and logistics disruptions could be announced in the coming days.

Despite the current geopolitical tensions, the government expects India’s total goods and services exports to reach around $860 billion, according to the commerce ministry.

Agrawal said India will also attempt to offset any temporary decline in shipments to West Asia by expanding exports to other regions. The government expects merchandise exports to remain in positive territory compared with the previous fiscal year as trade diversification efforts continue.