India and the US are in advanced talks to convert a February 26 joint statement into a bilateral trade deal, Commerce Secretary Rajesh Agrawal said earlier this month.
In-person meetings would be held to shape the agreement’s structure and timelines, he said.
India’s trade surplus with the US narrowed to $34.4 billion in fiscal year 2026 from $43 billion a year ago. Exports to the US rose 1% to $87 billion, while imports jumped 16% to $53 billion. In April, China said it became India’s largest trading partner in the 2025-26 financial year, overtaking the US. Washington was New Delhi’s largest trading partner for four years in a row until 2024-25.
India and the US announced an interim trade deal in February, after months of negotiations following a steep 50% tariff imposed by Washington on the South Asian nation in August 2025.
In February, Washington reduced India’s tariff burden to 18% from the earlier 50%. Half of the tariff was for New Delhi’s imports of Russian oil.
Talks with the US then came to a halt after the US Supreme Court struck down tariffs on imports from various countries.
The US will not allow India to emerge as a strong competitor like China, Deputy Secretary of State Christopher Landau said in March.
Washington views the 2001 decision to facilitate China’s entry into the World Trade Organization as a strategic miscalculation, Landau added.
India has recently signed trade deals with the UK, Oman, New Zealand, and the EU, as it looks to diversify export markets and reduce reliance on the US.
