India-US trade pact 'done and dusted,' awaits competitive advantage terms

India's Commerce and Industry Minister Piyush Goyal announced on Thursday that the bilateral trade agreement with the United States has been negotiated to completion, but will not move to execution until India secures what he calls the right competitive advantage in American markets. The framework for the first phase of the pact was finalized in February, but shifts in the US tariff landscape have forced both countries back to the negotiating table to work out the terms that will actually govern trade once the agreement takes effect.

Goyal's statement comes as he prepares to travel to Milwaukee, Wisconsin, for the G20 Trade Ministerial meeting scheduled for September 30 to October 1. During that visit, he will meet with US Trade Representative Jamieson Greer, and the progress of the India-US negotiations is expected to be a central topic. The minister framed the situation plainly: India has now finalized nine free trade agreements, with the US pact among them, but the execution phase depends on finding terms that give Indian exporters a genuine edge over their competitors in the American market.

Beyond the US agreement, Goyal highlighted significant gains India secured in its recently concluded trade negotiations with the European Union. Under the India-EU Free Trade Agreement, India has won zero-duty market access for more than 90 percent of its steel exports, with the ability to ship up to 2.8 million tonnes of steel annually under various quota arrangements. The minister also secured a USD 500 million commitment from the EU on climate finance, which he described as the opening move in what he expects will be a longer series of financial commitments from Europe. These victories came as India negotiated against new European regulations, including the Carbon Border Adjustment Mechanism and Deforestation Regulations, which the minister argued would ultimately push manufacturing away from Europe and toward countries like India that offer lower regulatory burdens and stronger protections for intellectual property and investment.

Goyal's broader strategy reflects India's effort to build a network of preferential trade agreements that will eventually provide access to markets representing approximately 75 percent of global GDP. Negotiations with Canada are moving quickly, the minister said, after he and Canada's International Trade Minister Maninder Sidhu resolved outstanding issues during a meeting in Mumbai the previous week. Mexico's Terms of Reference for negotiations have been finalized, and India's Commerce Secretary Rajesh Agrawal is expected to travel there the following week to formally launch talks. The first round of negotiations with the Gulf Cooperation Council is scheduled for October, following the signing of the Terms of Reference in February. Discussions with Chile may conclude soon, though Goyal suggested that competitive pressures make a Peru agreement unlikely in the near term.

The minister used the occasion to defend India's 2019 decision to stay out of the Regional Comprehensive Economic Partnership, the mega free-trade agreement among ten ASEAN members and six other countries including China. Goyal characterized the RCEP as effectively an India-China trade pact, since India already had agreements with ASEAN, Japan, and South Korea at the time negotiations were underway. He argued that earlier governments had made a strategic error in even entering those talks, given that China was the primary new trading partner the agreement would have created.

On a separate front, Goyal acknowledged that India faces challenges in establishing itself as a major maritime hub, but said the government is undertaking substantial changes to its maritime regulatory infrastructure to attract more shipping companies to flag their vessels under the Indian registry. He described this effort as a work in progress, part of a larger push to make India the world's most attractive jurisdiction for maritime operations.