INDIA and the United States failed to reach an agreement during recent trade talks, with New Delhi refusing to rush into a deal without better terms, according to officials and analysts.
India's trade minister, Piyush Goyal, said on Monday that both countries remained "fully engaged" in their commitment to reaching an agreement that is balanced and beneficial to both economies.
The latest round of negotiations ended without an interim trade agreement after US Trade Representative Jamieson Greer's visit to New Delhi last month, despite expectations on both sides that a limited deal could be reached.
An Indian government official familiar with the talks said there was no consensus because Washington did not provide assurances on New Delhi's key demands, including a tariff advantage over competitors such as China and protection from any new US levies after a deal is signed.
"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," the official said.
Washington had hoped to secure trade concessions from a strategic partner as president Donald Trump prepares new tariffs expected to take effect later this month, officials and analysts said. India's decision to hold out could expose its exports to higher levies and prolong uncertainty for businesses.
Goyal had earlier expressed optimism about reaching a consensus. But a day after the talks with Greer, he said the US deal would not be implemented unless it ensured an advantage for India, signalling New Delhi's firmer position despite the possibility of higher tariffs.
Like most countries, the bulk of goods from India currently face a 10 per cent US tariff. But the Trump administration is expected to introduce steeper tariffs later this month through probes into excess industrial capacity. India has denied US charges of surplus capacity.
Washington has already proposed new tariffs of up to 12.5 per cent on dozens of nations, including India, over allegations they failed to curb trade in goods made with forced labour.
The US view has been that India needs to earn the preferential treatment on trade provisions it has sought by making its own concessions, a US source aware of the talks said.
The Indian official and the US source did not wish to be named because the negotiations are confidential. The Indian trade ministry and the Office of the United States Trade Representative did not respond to emailed requests for comment ahead of publication.
"I had fantastic meetings with USTR Jamieson Greer when he visited Delhi in June," Goyal said on Monday. "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."
Indian Trade Secretary Rajesh Agrawal, the top official in the ministry, said: "The framework deal is ready, whenever it is the right time, it will be signed".
A US official, speaking on condition of anonymity, said Washington remained engaged with India and still expected an agreement, but did not offer a timeline.
The official, however, added that India had at times been slow, bureaucratic and difficult in the negotiations, signalling that no quick deal was likely.
Asked about the impasse, White House spokesman Kush Desai said: "The Trump administration continues to productively engage with Indian officials to finalise a historic trade deal that puts Americans and America First."
Trade analysts said rising exports, new trade agreements with other countries and blocs, and easing economic risks had strengthened India's position.
India's overall goods exports rose about 15 per cent year on year in April-June despite disruptions caused by the war on Iran, supported by higher-value petroleum shipments, officials said.
Exports to Gulf countries recovered to pre-war levels, rising to $5.3 billion in May from $2.62 billion in March as traders shifted to alternative shipping routes. Exports to the United States also increased to $17.29 billion during April and May.
India is also expanding access to other developed markets, with a UK free trade agreement due to take effect this month and an EU agreement expected by early next year.
"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," said Wendy Cutler, senior vice president at the Washington-based Asia Society Policy Institute, and a former US trade official.
The interim US-Iran peace deal improved India's economic outlook by easing oil prices, Goldman Sachs economist Santanu Sengupta said in a report.
The bank has raised its 2026 growth forecast for India to 6.8 per cent and lowered its inflation and current account deficit estimates, suggesting New Delhi has more economic room to hold out for better terms.
A weaker rupee has also improved exporters' competitiveness.
India is also calculating that some US trade measures could face legal or political setbacks, another Indian official said.
A group of 22 Democratic state attorneys general have already filed objections to the Trump administration's proposed tariffs arising from probes into forced labour.
Trade analysts said legal uncertainty over US tariffs, along with Modi's recent state election victories, had helped India resist pressure to conclude a deal quickly.
Senior leaders of Modi's Bharatiya Janata Party have argued publicly that trade agreements should protect Indian farmers and small businesses, two constituencies that New Delhi has long shielded in trade negotiations.
"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," said Ajay Srivastava, founder of the Global Trade Research Initiative, and a former trade negotiator.
(With inputs from Reuters)
