India seeks tariff breaks in interim trade deal with U.S.

India has moved tariff concessions to the center of its trade talks with Washington, signaling that New Delhi wants more than a symbolic handshake from an interim deal. The ask goes beyond lower duties on a few products: Indian negotiators are pressing for preferential rates that would keep their exporters competitive and shield them from fresh tariff shocks after the agreement is signed.

The bargaining has sharpened as both sides try to turn a February 6 framework for an Interim Agreement on reciprocal and mutually beneficial trade into a first tranche that could be completed by mid-July. The wider U.S.-India Bilateral Trade Agreement talks began after Donald J. Trump and Narendra Modi launched them on February 13, 2025, but progress slowed after the U.S. Supreme Court ruled in February 2026 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. That ruling undercut the legal basis for Trump’s sweeping duties and added another layer of uncertainty to the negotiating table.

India’s leverage is tied to Washington’s own tariff agenda. The Office of the United States Trade Representative said on June 2 that failures to enforce a prohibition on imports produced with forced labor are actionable under Section 301 for 60 economies, and Reuters reported that the United States has floated an additional 12.5% tariff on imports from India and others over forced-labor concerns. U.S. officials are also weighing a separate tariff linked to claims that India has excess capacity in sectors such as textiles and is sending too much into the American market. For Indian officials, that combination makes tariff relief a prerequisite, not a sweetener.

A senior Indian trade official said the deal cannot be finalized until the tariff issue is resolved and that any rate must be competitive with direct rivals. India is also asking for a guarantee that it will not be hit with new tariffs after the agreement is completed, a demand that reflects how fragile any short-term deal could be if Washington keeps its tariff tools in reserve.

The talks picked up speed last week when a U.S. delegation led by Assistant U.S. Trade Representative for South and Central Asia Brendan Lynch spent June 1 to June 4 in New Delhi. Those meetings followed face-to-face negotiations in Washington from April 20 to April 23. Piyush Goyal said on June 5 that the first tranche could be concluded by mid-July. Whether that becomes a substantive breakthrough or a politically useful placeholder will depend on one question: whether the two sides can settle tariffs in a way that protects both market access and future leverage.