The discussions at Vanijya Bhawan involve Commerce Secretary Rajesh Agrawal and India's Chief Negotiator Darpan Jain, building on preparatory talks held earlier this month. While President Donald Trump recently described the two nations as being close to a final deal, the legal environment surrounding the pact has shifted significantly since the initial framework was unveiled in February.
The original agreement relied on a 50 percent tariff structure that was invalidated by the US Supreme Court. Following that ruling, the Trump administration imposed a temporary 10 percent levy on all countries under Section 122 of the Trade Act, which is set to expire on July 24. Because the initial trade framework included a clause allowing for commitment modifications if tariff regimes change, both sides are effectively renegotiating the terms to maintain India’s competitive edge against regional rivals like Vietnam and Thailand.
Beyond tariffs, the deal encompasses India’s proposal to reduce duties on US industrial and agricultural goods in exchange for a planned USD 500 billion purchase of American energy, aircraft, and technology over five years. Further complicating the environment, India remains the subject of two ongoing Section 301 investigations initiated by the US in March. As the second-largest trading partner for India, the US remains a critical market, though India’s trade surplus narrowed to USD 34.4 billion during the 2025-26 fiscal year.
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