The United States (US) is expected to reduce the existing 25 per cent tariff on several Indian exports to 18 per cent this week, and any delay in the implementation will be taken up by the Indian team that is scheduled to visit Washington later this week.
“The 25 per cent (punitive) tariffs have already gone and other 25 per cent (tariff will be reduced to) 18 per cent. I am told they are processing (it) and it should be done fast. Our expectation is that it will happen this week. In case it is not done, then the team is there next week and we can pursue why it is taking time,” Commerce Secretary Rajesh Agrawal told reporters in a briefing on Monday.
A team of officials headed by Darpan Jain, the chief negotiator of the India–US trade agreement, is headed to Washington later this week to finalise the legal agreement. Both sides are currently engaged virtually to finalise the legal text, and in-person discussions between both sides are expected to carry on till next week in Washington.
India and the US issued a joint statement towards an interim trade agreement on February 7 stating the contours of the deal. As a first step, the US removed the 25 per cent punitive tariffs imposed on India “in recognition of India’s commitment to stop purchasing Russian Federation oil”.
The negotiating teams are now engaged to translate the contours of the deal into a legal agreement that will be signed between the two sides by March.
“The effort is to finalise, close and sign the legal agreement in the month of March 2026. It is an effort, but I am not putting a deadline to it. Because legal agreement finalisation has certain intricacies which have to be resolved satisfactorily,” Agrawal said.
He further said that the variety of cotton that India currently imports from the US is the same that will get preferential market access under the deal. To be sure, India primarily imports extra-long staple cotton from the US. India also imports upland cotton from America. However, the US mainly exports upland cotton, with the commodity being its main variety of cotton produce.
The comment came against the backdrop of Commerce and Industry Minister Piyush Goyal’s statement last week that India will also secure concessional-duty access for garments made from yarns and cotton under the interim trade deal with the US — similar to the benefits Bangladesh has secured under its pact with Washington.
Excluding digital trade
A senior commerce department official on Monday said that the digital trade chapter is not a part of the interim trade deal agreed upon by India and the US.
While New Delhi and Washington will negotiate bilateral digital trade rules, that will be part of the comprehensive trade pact — also known as the bilateral trade agreement (BTA) — that will take time to finalise.
According to the White House fact sheet released last week, but later tweaked, India will negotiate digital trade rules to prevent imposition of customs duties on e-commerce electronic transmissions and will scrap the digital services tax.
However, a day later, the fact sheet was amended and the revised version was released in line with the joint statement, which states: “India will address non-tariff barriers that affect bilateral trade in priority areas. The United States and India will negotiate rules of origin that ensure that the agreed benefits accrue predominately to the United States and India.”
