India will finalise its trade agreement with the United States only after Washington offers tariff terms that give Indian exporters a competitive advantage over key Asian rivals, Commerce and Industry Minister Piyush Goyal said on Thursday.
Goyal said India expects preferential treatment compared with competing economies such as China, Vietnam, Thailand, Malaysia, the Philippines, Bangladesh and Sri Lanka. The demand is aimed at ensuring that Indian products are not placed at a disadvantage in the US market, particularly in sectors where Asian countries compete directly for export orders and manufacturing investment.
India and the US had announced a framework for an Interim Agreement on reciprocal trade in February 2026. Under the framework, the US agreed to apply an 18% reciprocal tariff on a range of qualifying Indian products, including textiles, apparel, leather goods, footwear, plastics, chemicals and certain machinery.
However, New Delhi has maintained that the final agreement will depend on how India's tariff treatment compares with that offered to its competitors.
“As soon as the US are able to give us a competitive rate in comparison to our competitors, we will finalise the BTA and announce the final details,” Goyal said.
The issue is particularly significant as India seeks to position itself as an alternative manufacturing hub to China and compete with countries such as Vietnam for companies diversifying their Asian supply chains. Even relatively small differences in US tariffs can influence where companies manufacture or source products, especially in price-sensitive sectors such as textiles, footwear and electronics.
Negotiations between New Delhi and Washington are continuing, but no firm deadline has been announced for concluding the broader Bilateral Trade Agreement.
India's position signals that securing lower tariffs alone may not be enough. New Delhi wants the final arrangement to provide Indian exporters with a measurable advantage over their regional competitors before signing off on the deal.
