India conditions US trade deal on tariff advantage over competitors

India's Commerce Minister Piyush Goyal laid out a clear condition for moving forward with the United States on trade this week: Washington must first ensure that Indian exporters get better tariff treatment than their competitors across Asia before the first phase of a bilateral trade agreement takes effect.

Goyal, speaking on Thursday, framed the requirement as straightforward economic logic. India and the US had announced the proposed Bilateral Trade Agreement in a joint statement on February 7, 2026. Now, nearly six months later, India is signaling it will not activate the opening tranche of that deal unless New Delhi gains what Goyal called a "comparative advantage on comparable duties" — meaning Indian goods should face lower tariffs than those from neighboring countries and ASEAN nations when entering the American market. The minister said India would continue to pursue opportunities in the US market, but only under those conditions.

The tariff advantage demand reflects India's negotiating position as it balances multiple trade relationships simultaneously. The US has already moved on its own investigations into Indian imports. Under Section 301 of the US Trade Act, American authorities have launched probes into forced labor practices and excess capacity in Indian manufacturing. The US has already imposed a 10 percent tariff following its forced labor investigation, and another examination into excess capacity remains underway. Goyal confirmed that India had participated in those proceedings, suggesting New Delhi is engaged in the process even as it sets conditions for the broader trade deal.

When asked about reports that the US might impose additional tariffs on imports linked to Russian oil, Goyal declined to engage, calling the matter speculative. The refusal to comment suggests either that negotiations are still fluid on that front or that India prefers not to signal its position publicly while discussions continue.

Meanwhile, India is advancing other trade relationships that appear closer to completion. The India-European Union free trade agreement is nearing the end of its legal review process, Goyal said. Once that review concludes, the agreement will move to the European Parliament and other relevant institutions across the 27-member bloc for formal approval. That timeline remains uncertain, but the minister's language suggested the finish line is visible.

On the export side, Indian business groups are expressing optimism about two newer trade arrangements. India has finalized free trade agreements with Oman and the United Kingdom that provide zero-duty access for Indian exports to both markets. Following a meeting with Export Promotion Councils, Goyal noted that exporters see real opportunity in those agreements to expand shipments without facing tariff barriers. For Indian manufacturers and exporters, zero-duty access is the gold standard — it means their goods can compete on price and quality alone, without the handicap of import duties.

The picture that emerges is one of India playing a careful hand across multiple trade fronts. With the US, it is holding firm on wanting preferential treatment before committing to the first phase of a larger deal. With Europe, it is waiting for legal machinery to complete its work. With Oman and the UK, it is already positioned to benefit from tariff-free entry. The strategy suggests India believes it has leverage — that Washington needs the deal enough to grant the tariff advantage Goyal is demanding, and that India can afford to wait while other trade relationships mature.