India and the United States are closer than ever to sealing the first part of their long-negotiated trade agreement. Commerce and Industry Minister Piyush Goyal said this week that the first tranche is finalised and in legal drafting, just as US Secretary of State Marco Rubio begins a visit to the region.
Where things stand
- Goyal said implementation will depend on clarity about India's competitive advantage once the text is complete.
- External Affairs Minister S. Jaishankar described the talks as nearing a "landing point".
- Dairy market access remains the biggest sticking point, given its sensitivity for millions of Indian farmers.
- Earlier in October, US Trade Representative Jamieson Greer cautioned that a deal was not imminent, so the final timing is still uncertain.
The tariff picture
- Under a framework agreed in February, the US cut its reciprocal tariff on most Indian goods from 25 percent to 18 percent.
- It also removed an additional 25 percent duty linked to India's purchases of Russian oil.
- In return, India agreed to cut or remove tariffs on US industrial goods and some farm products such as tree nuts, fruit, soybean oil, wine and spirits.
What India may buy more of
To narrow its trade surplus with the US, India could increase purchases of commercial aircraft, coking coal, gold, energy and defence equipment. The US recently became India's largest LNG supplier for the first time, though shifting away from Russian crude is hard for Indian refineries built for medium sour grades, especially with shipping through the Strait of Hormuz disrupted.
Rubio's visit
Rubio travels to Samarkand, Mumbai and Jamnagar between 17 and 22 October, with talks with Jaishankar scheduled in Mumbai on 20 October. Trade, energy and regional security are expected to dominate the agenda.
Why it matters for Indian business
- Exporters in textiles, engineering goods, gems and jewellery, and pharmaceuticals gain from lower and more predictable US tariffs.
- Momentum is strong: India's merchandise exports rose 23 percent to $44.4 billion in September 2026.
- Importers of US goods could see lower duties once the agreement takes effect.
Follow the market impact in our weekly market analysis and read about another big deal this week, the IDBI Bank stake sale.
