MediumI Geo-Economics & Chokepoints3 September 2026, Thursday
Goyal: India will not finalise its trade deal with the US without securing a better tariff rate than its competitors
Commerce Minister Piyush Goyal said on 3 September that even though first-phase negotiations have closed, the deal will not be signed unless the US offers a preferential rate compared with competitors such as Vietnam and Bangladesh.
According to India TV, Goyal recalled that since 24 July the US has applied a 10% tariff to many countries, including India. The framework of the first phase was announced in February, but subsequent US tariff changes led to fresh bargaining. Goyal said they were seeking rates below those applied to competitors such as Sri Lanka, Bangladesh, Thailand, Cambodia, Vietnam, Indonesia and Malaysia, or zero tariffs. According to Open Magazine, Goyal stressed that every trade agreement must provide preferential access and that the interests of farmers and SMEs take priority. Goyal will travel to the US at the end of September for the G20 trade ministers' meeting.
In 2025 India's exports to the US were 103.82 billion dollars and US exports to India 45.6 billion dollars. Bilateral trade reached 149.42 billion dollars. Universal US tariffs have eroded the advantage granted to India in the February agreement. New Delhi wants a price advantage over South-East Asian and Bangladeshi competitors in textiles, electronics and seafood. The delay to the agreement is making exporters' investment plans uncertain. The US threat of sanctions against countries buying Russian oil adds further pressure to the negotiations.
Talay assessment
Bottom line
Goyal's statement is a negotiating position in response to US universal tariffs eroding the advantage granted to India under the February framework: New Delhi says it will not sign without a better rate than rivals such as Vietnam and Bangladesh. The threat of sanctions linked to Russian oil adds pressure at the table. The most likely course is for talks to drag on without a signature soon; the G20 trade ministers' meeting at the end of September is the first test.
Likely effects
- Indian exportersNegative1–6 months
The delay leaves investment plans uncertain for textile, electronics and seafood producers in India, which exported 103.82 billion dollars to the US; farmer and SME interests narrow the negotiating space.
- Asian supply chain competitionUncertain1–6 months
Tariff differentials in the US market determine the shift of orders and investment between India, Southeast Asia and Bangladesh; which country secures a preferential rate will shape textile and electronics production decisions.
- Turkish textile exportsUncertain1–6 months
For Turkish exporters competing with India and Bangladesh in apparel and textiles in the US market, the tariff rates these countries secure directly alter relative price competitiveness.
Possibilities, ranked
- 1Protracted negotiations60%
The parties maintain technical agreement on the first-phase text but fail to agree on the tariff rate; signing slips towards year-end and the current 10% duty remains.
Watch: No signing timetable emerging from Goyal's talks with US counterparts at the G20 trade ministers' meeting
- 2Limited deal with a preferential rate25%
The US grants India a rate below those of rivals; in return New Delhi reduces Russian oil purchases or concedes on market access.
Watch: A joint statement from the White House or India's Commerce Ministry setting out a rate differential versus rival countries
- 3Talks stall under sanctions pressure15%
The US advances its sanctions bill targeting buyers of Russian oil; with the threat of additional tariffs on India, negotiations reach deadlock.
Watch: The sanctions bill being put to a vote in the US Congress and an announcement of additional tariffs targeting India
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.