What's behind India's tougher stance in trade talks with US
The US entered trade talks from a position of strength. But a series of developments may be tilting the balance towards New Delhi. Here's why India is in no hurry to strike a deal.
For months, the assumption was that India would have to move quickly to secure a trade deal with the United States and avoid higher tariffs on its exports. Instead, New Delhi is doing the opposite.
According to a Reuters report, India has hardened its stance in trade negotiations, signalling that it would rather wait than sign an agreement that does not offer clear advantages. The report said the shift reflects a growing belief within the government that India's bargaining position has improved while Washington's ability to pressure trading partners has weakened.
Even after months of negotiations, India and the US failed to finalise an interim trade pact during US Trade Representative Jamieson Greer's visit to New Delhi last month despite expectations that a limited deal was within reach, Reuters reported.
However, Union Commerce and Industry Minister Piyush Goyal rejected the report's characterisation of the negotiations, calling the report "completely false, baseless and misleading".
"I had fantastic meetings with USTR Jamieson Greer, when he visited Delhi in June. Both sides reaffirmed their commitment to an agreement that is balanced, commercially meaningful, and delivers tangible benefits for businesses, farmers, workers, and consumers in both countries," tweeted Goyal.
DELAY OVER TWO KEY DEMANDS
Indian negotiators held back after Washington failed to provide assurances on two key demands – a tariff advantage over competitors such as China and a guarantee against fresh US levies after the agreement.
"Our position is clear. We don't intend to rush into a deal that is not on favourable terms or compromise on red lines like ceding ground on agriculture," an Indian government official familiar with the negotiations told international news agency Reuters.
A day after Greer's visit, Goyal reinforced that stance, saying India would not implement a trade deal unless it secured a clear advantage, signalling that New Delhi was willing to risk higher US tariffs rather than settle for unfavourable terms.
One reason for that confidence is the growing uncertainty surrounding the Trump administration's trade policy.
BEHIND INDIA'S TOUGHER STANCE
The tougher negotiating stance comes after India's position received a major boost from the US Supreme Court's February 2026 ruling striking down President Donald Trump's sweeping 50% tariffs, added the Reuters report.
In a landmark 6-3 judgment, the court held that the administration had exceeded its executive authority by invoking the International Emergency Economic Powers Act (IEEPA) to impose broad import duties without congressional approval.
Before the landmark US Supreme Court ruling, India had been negotiating under the pressure of a 50% penalty regime, which combined a 25% reciprocal tariff with a 25% punitive tariff linked to Russian oil purchases.
A bilateral trade agreement signed on February 2, 2026, initially dismantled that oil penalty and reduced India's tariff exposure to 18%.
However, a subsequent judicial intervention on February 20 struck down the broader executive tariff framework entirely, forcing the White House to pivot to a temporary 10% global fallback levy that effectively superseded the trade-deal rate.
The ruling also introduced legal uncertainty into the Trump administration's trade policy, weakening Washington's ability to enforce long-term tariff commitments.
Another Indian official told Reuters that New Delhi believes some of the remaining US trade measures could also face legal or political setbacks, further strengthening the case for holding out instead of rushing into a deal.
Indian trade organisations and policy bodies, including the Global Trade Research Initiative (GTRI), have used that uncertainty to argue against making concessions until the US establishes a legally stable and predictable trade regime, reported Reuters.
The legal uncertainty in the US has enabled India to resist reciprocal tariff structures while buying time for negotiations.
But legal developments are only part of the reason India believes it can afford to hold firm. Strengthening economic fundamentals have also improved New Delhi's negotiating position.
NEW TRADE PACTS BOOST LEVERAGE
India's overall merchandise exports rose about 15% year-on-year during April-June despite disruptions caused by the Iran war.
Exports to Gulf countries recovered to pre-war levels as traders shifted to alternative shipping routes, while shipments to the United States also increased during April and May.
At the same time, India is expanding market access elsewhere, with its free trade agreement with the UK set to come into force this month and an agreement with the European Union expected by early next year.
The growing network of trade partnerships has reduced India's dependence on any single market and given negotiators greater flexibility in their discussions with Washington.
"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," Wendy Cutler, senior vice president at the Washington-based Asia Society Policy Institute and a former US trade official, told Reuters.
Goldman Sachs has also raised India's 2026 growth forecast to 6.8% while lowering its inflation and current account deficit estimates, suggesting the economy has greater room to withstand prolonged negotiations. A weaker rupee has further improved the competitiveness of Indian exports.
Domestic political considerations have further reduced the pressure to strike a quick agreement, added the report.
Trade analysts quoted in the Reuters report said legal uncertainty over US tariffs, combined with Prime Minister Narendra Modi's recent state election victories, has given the government greater confidence to hold firm.
Time and again, BJP leaders have maintained that any agreement must safeguard Indian farmers and small businesses -- constituencies that New Delhi has consistently protected during trade negotiations.
Meanwhile, Washington continues to push for an agreement but has acknowledged that negotiations remain difficult. A US official said both sides remain engaged without offering any timeline, while describing India as slow, bureaucratic and difficult in the talks.
The Trump administration is still preparing additional tariffs later this month, including duties arising from investigations into excess industrial capacity and proposed levies linked to allegations of forced labour. India has rejected the US allegations of surplus industrial capacity.
The legal challenges to Washington's tariff regime also continue. A group of 22 Democratic state attorneys general has already filed objections to the administration's proposed tariffs arising from the forced labour probes.
For now, New Delhi appears convinced that time is no longer working against it.
Against that backdrop, analysts say New Delhi increasingly sees little reason to rush into a deal.
"India realises 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," Ajay Srivastava, founder of the Global Trade Research Initiative and a former trade negotiator, told Reuters.
Whether that strategy ultimately results in a better agreement remains uncertain. But unlike earlier in the negotiations, India now appears willing to wait rather than compromise on key demands.
For months, the assumption was that India would have to move quickly to secure a trade deal with the United States and avoid higher tariffs on its exports. Instead, New Delhi is doing the opposite.
According to a Reuters report, India has hardened its stance in trade negotiations, signalling that it would rather wait than sign an agreement that does not offer clear advantages. The report said the shift reflects a growing belief within the government that India's bargaining position has improved while Washington's ability to pressure trading partners has weakened.
Even after months of negotiations, India and the US failed to finalise an interim trade pact during US Trade Representative Jamieson Greer's visit to New Delhi last month despite expectations that a limited deal was within reach, Reuters reported.
However, Union Commerce and Industry Minister Piyush Goyal rejected the report's characterisation of the negotiations, calling the report "completely false, baseless and misleading".
"I had fantastic meetings with USTR Jamieson Greer, when he visited Delhi in June. Both sides reaffirmed their commitment to an agreement that is balanced, commercially meaningful, and delivers tangible benefits for businesses, farmers, workers, and consumers in both countries," tweeted Goyal.
DELAY OVER TWO KEY DEMANDS
Indian negotiators held back after Washington failed to provide assurances on two key demands – a tariff advantage over competitors such as China and a guarantee against fresh US levies after the agreement.
"Our position is clear. We don't intend to rush into a deal that is not on favourable terms or compromise on red lines like ceding ground on agriculture," an Indian government official familiar with the negotiations told international news agency Reuters.
A day after Greer's visit, Goyal reinforced that stance, saying India would not implement a trade deal unless it secured a clear advantage, signalling that New Delhi was willing to risk higher US tariffs rather than settle for unfavourable terms.
One reason for that confidence is the growing uncertainty surrounding the Trump administration's trade policy.
BEHIND INDIA'S TOUGHER STANCE
The tougher negotiating stance comes after India's position received a major boost from the US Supreme Court's February 2026 ruling striking down President Donald Trump's sweeping 50% tariffs, added the Reuters report.
In a landmark 6-3 judgment, the court held that the administration had exceeded its executive authority by invoking the International Emergency Economic Powers Act (IEEPA) to impose broad import duties without congressional approval.
Before the landmark US Supreme Court ruling, India had been negotiating under the pressure of a 50% penalty regime, which combined a 25% reciprocal tariff with a 25% punitive tariff linked to Russian oil purchases.
A bilateral trade agreement signed on February 2, 2026, initially dismantled that oil penalty and reduced India's tariff exposure to 18%.
However, a subsequent judicial intervention on February 20 struck down the broader executive tariff framework entirely, forcing the White House to pivot to a temporary 10% global fallback levy that effectively superseded the trade-deal rate.
The ruling also introduced legal uncertainty into the Trump administration's trade policy, weakening Washington's ability to enforce long-term tariff commitments.
Another Indian official told Reuters that New Delhi believes some of the remaining US trade measures could also face legal or political setbacks, further strengthening the case for holding out instead of rushing into a deal.
Indian trade organisations and policy bodies, including the Global Trade Research Initiative (GTRI), have used that uncertainty to argue against making concessions until the US establishes a legally stable and predictable trade regime, reported Reuters.
The legal uncertainty in the US has enabled India to resist reciprocal tariff structures while buying time for negotiations.
But legal developments are only part of the reason India believes it can afford to hold firm. Strengthening economic fundamentals have also improved New Delhi's negotiating position.
NEW TRADE PACTS BOOST LEVERAGE
India's overall merchandise exports rose about 15% year-on-year during April-June despite disruptions caused by the Iran war.
Exports to Gulf countries recovered to pre-war levels as traders shifted to alternative shipping routes, while shipments to the United States also increased during April and May.
At the same time, India is expanding market access elsewhere, with its free trade agreement with the UK set to come into force this month and an agreement with the European Union expected by early next year.
The growing network of trade partnerships has reduced India's dependence on any single market and given negotiators greater flexibility in their discussions with Washington.
"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," Wendy Cutler, senior vice president at the Washington-based Asia Society Policy Institute and a former US trade official, told Reuters.
Goldman Sachs has also raised India's 2026 growth forecast to 6.8% while lowering its inflation and current account deficit estimates, suggesting the economy has greater room to withstand prolonged negotiations. A weaker rupee has further improved the competitiveness of Indian exports.
Domestic political considerations have further reduced the pressure to strike a quick agreement, added the report.
Trade analysts quoted in the Reuters report said legal uncertainty over US tariffs, combined with Prime Minister Narendra Modi's recent state election victories, has given the government greater confidence to hold firm.
Time and again, BJP leaders have maintained that any agreement must safeguard Indian farmers and small businesses -- constituencies that New Delhi has consistently protected during trade negotiations.
Meanwhile, Washington continues to push for an agreement but has acknowledged that negotiations remain difficult. A US official said both sides remain engaged without offering any timeline, while describing India as slow, bureaucratic and difficult in the talks.
The Trump administration is still preparing additional tariffs later this month, including duties arising from investigations into excess industrial capacity and proposed levies linked to allegations of forced labour. India has rejected the US allegations of surplus industrial capacity.
The legal challenges to Washington's tariff regime also continue. A group of 22 Democratic state attorneys general has already filed objections to the administration's proposed tariffs arising from the forced labour probes.
For now, New Delhi appears convinced that time is no longer working against it.
Against that backdrop, analysts say New Delhi increasingly sees little reason to rush into a deal.
"India realises 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," Ajay Srivastava, founder of the Global Trade Research Initiative and a former trade negotiator, told Reuters.
Whether that strategy ultimately results in a better agreement remains uncertain. But unlike earlier in the negotiations, India now appears willing to wait rather than compromise on key demands.
