India-US trade deal nears close as Trump signals different pact

A familiar promise, under new conditions

On Tuesday, President Donald Trump said Washington and New Delhi are close to a trade agreement after more than a year of talks. He also said the result would look unlike the deals his administration has struck before. "They want to make a deal. We're going to make a deal. Pretty close, yeah," he told reporters, adding that it would be "a much different kind of deal" than earlier ones. He did not say what would make it different.35

He spoke while Secretary of State Marco Rubio was in India, starting in Mumbai, for talks with External Affairs Minister S Jaishankar on trade, energy security, defence and technology.2 Rubio went further than Trump. He said the two countries are "about as close as you can be without having an executed agreement," with "a small number of items left to wrap up." He also suggested the two leaders could sign the pact once those items are settled.3 In an interview with The Indian Express, he said a deal was "weeks, not months" away and that "99% of the work is done."1

The reports agree on the main points: the deal is close, Rubio is optimistic, and Trump has said almost nothing about its contents. They differ on smaller details. Some outlets call Rubio's trip a two-day visit, while others describe it as three days, running October 20 to 22.19 The more important gap is between what officials are saying and what has been made public. Several outlets note that neither side has announced a final agreement or named the remaining issues.25 A few reports, however, describe the agreement as if its terms were already settled. They mention "comprehensive tariff rationalisation" and zero-duty access across large product categories.10 Readers should treat those descriptions as aspirations until a signed text appears.

Why this deal has taken so long

The current talks only make sense in light of how unsettled the tariff situation has been. In February, the two countries announced a framework for an interim agreement. Washington agreed to apply an 18% reciprocal tariff on Indian goods. India agreed to eliminate or cut tariffs on all US industrial goods and many farm products, including distillers' grains, tree nuts, fruit, soybean oil, and wine and spirits.11 At the same time, Trump removed an extra 25% duty that had been imposed over India's purchases of Russian oil. The US described that move as recognition of India's commitment to stop buying Russian crude.13 India also said it intended to buy more than $500 billion in US energy, technology, coal and other goods.13

Within weeks, the legal basis for that arrangement disappeared. On February 20, the US Supreme Court ruled that the reciprocal duties imposed under the International Emergency Economic Powers Act were illegal.18 The tariffs stopped being collected on February 24. One customs analysis found no order ever put the agreed 18% rate into effect before the regime ended.14 A temporary 10% surcharge under Section 122 replaced it and expired on July 24. Since then, the main extra duty on Indian goods has been a 10% Section 301 levy linked to forced-labour import practices.2228

This is the key context for Trump's comment that the deal will be "much different." A pact built in February around a reciprocal tariff now has to work with a different set of legal tools. In June, the US Trade Representative named India among 54 economies it said lacked adequate bans on goods made with forced labour. It proposed extra duties of 10% to 12.5%.25 Indian negotiators said openly at the time that any deal depended on how the Section 301 probes would affect India and on securing a rate competitive with direct rivals.21 Treasury Secretary Scott Bessent added to that pressure by predicting that Section 301 actions would bring tariff rates back "exactly where they were."27

India responded by changing its own rules. In July it amended its Foreign Trade Policy to ban imports made with forced labour. Washington then put India in the lower 10% tier instead of the proposed 12.5%.29 New Delhi's commerce ministry said about 45% of India's exports to the US, including generic pharmaceuticals and smartphones, fall outside that 10% duty.29

The trade-war background: Russian oil and the waiver

The most recent obstacle was not trade policy but sanctions. Last Friday, Trump waived tariffs of up to 100% that had been threatened against buyers of Russian energy, a group that includes India. Reporting widely treats the waiver as clearing a path for the talks.2 Rubio openly linked the two issues. Speaking in Uzbekistan before his trip, he said the trade negotiations were among the factors behind Trump's national-security waivers.9

The waiver is a postponement, not a repeal. Under the sanctions law, the secondary measures have been deferred, and the president can still invoke them.9 One outlet summed this up as "deferred, not dead."6 In Mumbai, Rubio tried to soften the message. He said "none of these tariffs are done to punish or harm India" and described them as part of Washington's wider response to Russia's war in Ukraine.17 The leverage is still there, though. When the February executive order lifted the Russian-oil penalty, it told the Commerce Department to watch whether India resumed those purchases and allowed for the 25% duty to come back.20

This is the feature of the relationship most likely to outlast any signing. India's tariff treatment is tied to its energy choices, and Washington has kept the ability to raise duties again. The US is also asking for more energy cooperation, including encouraging Reliance Industries to refine more Venezuelan crude. Rubio was scheduled to visit the company's Jamnagar refinery.2

What New Delhi actually wants

India's demands have stayed consistent and fairly limited. Commerce Minister Piyush Goyal said the first tranche of the agreement has been finalised and is in legal drafting. He added that India would put it into effect "once we get a comparable or competitive advantage over our peer countries."9 Reporting puts those peers as Bangladesh, Vietnam and Indonesia.19 Earlier, an Indian source said New Delhi expected better rates than South and Southeast Asian developing economies, including Bangladesh, Pakistan and Sri Lanka.26

That condition explains why the timing depends on decisions in Washington, not New Delhi. A separate Section 301 investigation into "structural excess capacity," launched in March with India among the target economies, had not produced a determination as of October 10.28 One report says Commerce Secretary Rajesh Agrawal expects the deal to close while the US separately formalises a broader tariff structure under Section 301. The same report says Trump has roughly ten days left on a 30-day statutory clock to decide how tariffs will apply.19 If the excess-capacity finding raises duties on India's competitors more than on India, New Delhi gets the advantage it has been asking for. If it does not, the remaining "technical details" could take longer to resolve.

The dates suggest this is already a factor. Jaishankar said in late September that the two sides had "more or less an understanding" but that changes to the US tariff framework had made timing harder.12 Goyal met US Trade Representative Jamieson Greer in Milwaukee and Washington earlier this month to work on details.4 US Ambassador Sergio Gor said last week that "the big items are done."3

Reading the signals

The sources support a fairly clear conclusion: a first-phase agreement is genuinely near, but "close" means something different now than it did in February. Rubio's caution was telling. He said it is important for every detail to be agreed before an announcement, so that a deal is not declared and then found to be unfinished.10 That reads as a lesson from this year, when an announced framework was undone by a court ruling before it fully took effect.

Trump's "much different kind of deal" is likely to be less a new model of trade policy and more a reflection of what tools remain. Without emergency tariff powers, any US concession has to be delivered through Section 301 tiers, Section 232 carve-outs and threats that can be put on hold, such as the Russia-energy tariffs. The February framework had already promised relief on Section 232 duties for some Indian aircraft parts and a preferential quota for auto parts. As of early October, a customs tracker found no proclamation putting either into effect.14

For exporters, the practical advice is to wait for official notices. Until a signed text and implementing orders appear in the Federal Register, the rates linked to this deal remain uncertain.14 A signing in the coming weeks looks likely. Whether it gives India the lasting tariff advantage over its rivals that it has pursued all year depends on the Section 301 decisions Washington has not yet announced.