India has refused to accelerate negotiations on a trade agreement with the United States, signaling that Prime Minister Narendra Modi’s government is prepared to withstand the threat of higher U.S. tariffs rather than accept terms it considers unfavorable. The stance reflects New Delhi’s growing confidence in its economic outlook, expanding export markets, and strengthening political position at home, according to government officials and trade analysts.
The tougher negotiating posture emerged after months of discussions failed to produce an interim trade agreement during U.S. Trade Representative Jamieson Greer’s visit to New Delhi last month. Although both governments had expressed optimism that a limited agreement could be reached, negotiations stalled over key Indian demands that Washington declined to meet.
According to an Indian government official familiar with the negotiations, the United States did not provide assurances that India would receive a tariff advantage over major manufacturing competitors such as China. Washington also stopped short of guaranteeing that it would refrain from imposing additional tariffs after any agreement entered into force, leaving New Delhi unconvinced that a deal would provide lasting commercial benefits.
“Our position is clear—we don’t intend to rush into a deal that is not on favorable terms or compromise on red lines like ceding ground on agriculture,” the official said, underscoring India’s determination to protect one of its most politically sensitive sectors.
The impasse illustrates the increasingly complex relationship between Washington and New Delhi as President Donald Trump prepares another round of tariff measures expected to take effect later this month. The administration has sought rapid trade concessions from strategic partners while pursuing a broader effort to reshape global trade relationships through higher import duties.
For India, however, accepting a hurried agreement could expose key domestic industries to long-term disadvantages without guaranteeing improved market access to the United States. Agriculture remains particularly sensitive, with successive Indian governments resisting foreign pressure to liberalize protections for millions of farmers who represent an influential political constituency.
Indian Commerce and Industry Minister Piyush Goyal reinforced that message shortly after Greer’s visit, declaring that any agreement with Washington would move forward only if it clearly benefited India. His remarks reflected New Delhi’s increasingly cautious approach despite the possibility that Indian exports could face steeper tariffs if negotiations remain unresolved.
At present, most Indian goods entering the United States are subject to a baseline tariff of 10%. However, the Trump administration is expected to introduce significantly higher duties through investigations into what it describes as excess industrial capacity. India has rejected Washington’s allegations that it contributes to global overcapacity.
The United States has also proposed additional tariffs of up to 12.5% on dozens of countries, including India, alleging insufficient action against products manufactured using forced labor. Those measures remain under review but have added urgency to ongoing negotiations.
A U.S. source familiar with the discussions said Washington believes India must earn preferential treatment by making meaningful concessions of its own rather than expecting favorable terms from the outset. Both the Indian and U.S. sources requested anonymity because the negotiations remain confidential.
Neither India’s Ministry of Commerce and Industry nor the Office of the United States Trade Representative responded to requests for comment regarding the latest round of negotiations.
Another U.S. official, also speaking anonymously, said negotiations remain active and that Washington still expects an eventual agreement. However, the official acknowledged that India’s negotiating process has often been slow, bureaucratic, and difficult, suggesting that no breakthrough is likely in the immediate future.
White House spokesperson Kush Desai maintained that negotiations continue productively, saying the Trump administration remains committed to finalizing what he described as a historic agreement that advances American interests.
India’s willingness to delay a deal has been strengthened by a series of favorable economic developments that have reduced the urgency of securing immediate tariff relief from Washington.
Government officials said India’s merchandise exports increased by approximately 15% during the April-June quarter compared with the same period a year earlier, despite disruptions caused by conflict involving Iran. Higher petroleum prices helped support export revenues during the period.
Trade with Gulf nations has also recovered strongly after temporary disruptions to shipping routes earlier this year. Exports to the region climbed to approximately $5.3 billion in May from $2.62 billion in March as exporters adapted to alternative maritime routes. Shipments to the United States likewise continued to expand, reaching $17.29 billion during April and May.
Meanwhile, India has accelerated efforts to diversify its trade relationships beyond the United States. A free trade agreement with the United Kingdom is scheduled to take effect this month, while negotiations with the European Union are progressing toward a broader agreement that officials expect could be completed early next year.
Those developments have strengthened New Delhi’s negotiating position, according to Wendy Cutler, senior vice president at the Asia Society Policy Institute and a former U.S. trade negotiator.
“Indian negotiators have gained some leverage in the talks, given its strong economy, diversification initiatives with other partners, and its strategic standing in the world,” Cutler said.
Economic conditions have also become more favorable following the preliminary peace agreement between the United States and Iran, which helped ease global oil prices and reduced pressure on India’s import bill.
Goldman Sachs economist Santanu Sengupta recently raised the bank’s forecast for India’s economic growth in 2026 to 6.8% while lowering projections for inflation and the current account deficit. The improved outlook suggests India has greater flexibility to wait for more favorable trade terms rather than rushing into an agreement.
A weaker rupee has further improved the competitiveness of Indian exports, providing additional support for manufacturers facing uncertain access to U.S. markets.
Indian policymakers are also monitoring legal challenges to the Trump administration’s tariff agenda. Another Indian official said New Delhi believes some proposed U.S. trade measures could ultimately face judicial or political obstacles that weaken Washington’s negotiating leverage.
A coalition of 22 Democratic state attorneys general has already challenged proposed tariffs linked to forced labor investigations, adding another layer of uncertainty to the administration’s trade policy.
Domestic politics have also strengthened Modi’s negotiating position. Recent electoral successes by the ruling Bharatiya Janata Party have reduced immediate political pressure on the government, while senior party leaders continue emphasizing that trade agreements must safeguard Indian farmers and small businesses.
Those groups have historically received strong government protection during international trade negotiations and remain central to the BJP’s political coalition.
Ajay Srivastava, founder of the Global Trade Research Initiative and a former Indian trade negotiator, said delaying an agreement may ultimately prove the wiser course.
“India realizes that delaying—or even abandoning—a rushed deal may be more prudent than locking into obligations whose costs could far exceed any temporary tariff relief,” Srivastava said.
With both governments maintaining firm negotiating positions, prospects for a rapid breakthrough remain uncertain. While Washington continues seeking faster progress before implementing another round of tariffs, India appears increasingly confident that its improving economy, diversified export markets, and strengthened political standing allow it to negotiate on its own timetable rather than under external pressure.
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