Goyal Says India-US Trade Pact Will Be Finalised 'In Line With Changed Circumstances' Eight Months After February Framework

Eight months after India and the US announced a framework for an interim trade agreement in the first week of February, India's commerce minister says the deal is still being rewritten around new conditions.

Piyush Goyal told members of the industry chamber PHDCCI in New Delhi on Saturday, Oct. 10, that the pact will be finalised with those changes in mind. In Hindi, he said: "USA (trade pact) February me announce hua. Thodi paristhitiyan badli hain, usko abhi madde nazar rakhte hue final hoga." Translated: it was announced in February, some circumstances have changed, and the final decision will account for that.

Goyal did not say which circumstances he meant.

Concluded, but not finished

The Saturday remarks followed a more upbeat line on Friday, Oct. 9, at the ET Startup Awards in Bengaluru. "We have concluded the deal. We have nothing more to add, to give or take. The fine print is being worked upon," Goyal said there.

He also said circumstances have "significantly changed from the time in the first week of February when we shook hands and announced the deal."

The sticking point, in his words: "The key issue is how the US will give us the comparative advantage we had agreed upon in Feb. That requires legal expertise, which AI cannot provide, because this goes beyond the textbook."

India's goal is plain. It wants its goods to face lower US tariffs than those of competing exporters. Goyal explained that a free trade agreement does not have to eliminate duties on every product. A partner can instead get preferential access through lower rates than other countries pay.

The legal ground moved

The backdrop is a US Supreme Court ruling that limited the president's power to impose tariffs under the International Emergency Economic Powers Act, or IEEPA. Washington has since been examining other mechanisms for imposing tariffs and extending preferential treatment to trading partners.

That shift has pushed the two sides back into talks on the first phase of the bilateral trade agreement. A tariff advantage promised under one legal authority has to be rebuilt under another, and that is the work Goyal calls legal.

Goyal met US Trade Representative Jamieson Greer earlier this month on the sidelines of the G20 trade ministers' meeting in Milwaukee, where the two discussed the pact.

Sitharaman's "plateau"

Finance Minister Nirmala Sitharaman raised eyebrows on Oct. 5 at the Munich Leaders Meeting. She indicated both countries were nearing the limits of possible concessions, described the talks as difficult, and said further compromises could prove challenging. Her remarks prompted speculation that discussions had stalled.

Goyal's Friday comments were a response. His position is that the broad agreement is done and what remains is technical and legal. Sitharaman's description of the talks as hard and Goyal's description of the deal as concluded sit side by side, and neither minister has publicly reconciled them beyond that.

No final text has been published. Neither government has announced a signing date.

India's other trade tracks

Goyal used the PHDCCI appearance to lay out a wider agenda:

• Talks are under way with Israel, Chile, the Gulf Cooperation Council and the Russia-led Eurasian Economic Union.
• Negotiations with Canada are moving at a faster pace.
• Talks with the South Africa-led SACU group will start soon.
• Talks with Mexico will be launched next week.

He said several countries are keen to negotiate with India. The trade ministers of the UK and Canada are due to visit India next week. The UK minister is coming for the India-UK Joint Economic and Trade Committee meeting. India and the UK implemented their trade agreement in July.

That last point is a useful comparison. The UK deal went from agreement to implementation. The US deal, announced first, has not.

What to watch

The test is whether Washington can put the February advantage into a legally durable form now that IEEPA is a narrower tool. Goyal says the work is on and the substance is settled. The US side has not said so publicly in the material at hand, and the Greer channel is where any confirmation would come from.

Next week's visits by the UK and Canadian trade ministers will show how fast India's other negotiations are moving while the US text remains open.