India-US Trade Deal Faces Delays Amid Tariff Disputes

India's trade minister, Piyush Goyal, revealed on Monday that a trade agreement with the United States is experiencing delays. The primary hurdle, he explained, is the existing 50% tariff imposed on Indian goods. New Delhi is actively seeking preferential market access through this pact, a key objective for the nation's economic strategy.

The top U.S. trade diplomat will visit India on Tuesday for two-day talks, with New Delhi pushing for a trade pact on terms better than those for other Asian economies as both countries seek to close a deal crucial to mending strained ties.

U.S. Trade Representative Jamieson Greer's trip follows the first meeting in over a year between Prime Minister Narendra Modi and U.S. President Donald Trump on June 17 on the sidelines of the G7 summit in France.

In addition to uncertainty caused by the trade talks, the death of three Indian sailors in attacks on commercial ships by the U.S. Navy in the Gulf has added to diplomatic tensions.

An initial understanding on trade was reached in February, but uncertainty persists over a continuing U.S. Section 301 probe into alleged overcapacity and forced labour.

New Delhi is seeking a competitive tariff edge over regional peers, including ASEAN nations like Vietnam.

"We are trying to work out with the U.S. how they will ensure that we will get a comparative advantage, so that our exporters can benefit," Trade Minister Piyush Goyal said on Monday.

Goyal said he would be "happy" if a deal is finalised before July 24, when Washington's temporary 10% tariff on trading partners expires. "The faster, the better."

India will also seek assurances to ensure Washington doesn't levy new tariffs after the deal. India is also wary of further tariff threats if talks stall, a government official said.

Greer's office said the talks are aimed at "achieving fair, balanced, and reciprocal trade".

In February, the two sides agreed to 18% tariffs on Indian goods in exchange for New Delhi lowering trade barriers and buying more American goods. At the time, the tariff was lower than those for competing economies such as Bangladesh and Vietnam.

But a final deal was waylaid when the U.S. Supreme Court invalidated Trump's sweeping global tariffs.

Negotiations have been further complicated by the USTR's Section 301 investigations on India and other countries, which analysts say Washington is using to press India to open its markets for agricultural and other products, and to buy more U.S. energy and defence products.