India US trade pact talks are entering a decisive phase in New Delhi as tariff treatment under Washington’s Section 301 process remains a key unresolved issue.
India US trade pact talks resume in New Delhi
India US trade pact negotiations are expected to resume in New Delhi on Tuesday, June 2, 2026, as officials from both countries work to finalise a trade arrangement whose tariff terms may depend on US relief linked to Section 301 measures.
A US delegation led by Assistant US Trade Representative for South and Central Asia Brendan Lynch is due to hold three days of talks with Indian trade officials in New Delhi, as per an Indian government source. The discussions follow an interim trade framework announced by the two governments in February, but the pace of negotiations has been affected by uncertainty over Washington’s tariff policy.
The central issue now appears to be the tariff treatment India will receive if the agreement moves ahead. New Delhi is expected to raise the impact of Washington’s Section 301 investigation and related tariff measures during the discussions. The Indian trade source cited by Reuters said the deal could be agreed if India receives terms that are “fair, equitable, and balanced”.
Tariff relief remains central to India US trade pact
The United States and India announced in February that they had reached a framework for an interim agreement on reciprocal and mutually beneficial trade. The joint statement said the framework reaffirmed both countries’ commitment to a broader US-India Bilateral Trade Agreement.
Under that framework, India agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including tree nuts, soybean oil, fresh and processed fruit, wine and spirits, and other products. The United States, in turn, said it would apply a reciprocal tariff rate of 18 percent on originating goods from India, including textile and apparel, leather and footwear, organic chemicals, home décor and certain machinery.
The joint statement also said that, subject to successful conclusion of the interim agreement, Washington would remove reciprocal tariffs on a range of goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts. It further said India would receive negotiated outcomes on generic pharmaceuticals and ingredients, depending on the findings of the US Section 232 investigation into pharmaceuticals and pharmaceutical ingredients.
The latest talks are significant because India is seeking competitive tariff treatment when compared with other manufacturing hubs in South Asia and Southeast Asia. New Delhi wants terms that could place it ahead of direct competitors, including Bangladesh, Pakistan and Sri Lanka. That goal reflects India’s wider ambition to expand its role in global supply chains and strengthen access to the US market.
Section 301 adds uncertainty to the negotiations
Section 301 of the US Trade Act of 1974 allows Washington to investigate and respond to trade practices it considers unfair, discriminatory or burdensome to US commerce. It has previously been used in disputes involving digital services taxes, including India’s Digital Services Tax.
In June 2021, the US Trade Representative announced action in the form of additional duties of 25 percent on specified Indian products after determining that India’s Digital Services Tax was unreasonable or discriminatory and burdened or restricted US commerce. Those duties were suspended while broader international tax negotiations continued.
The present issue is different in timing and context. Trump administration launched fresh Section 301 investigations after the US Supreme Court struck down broader tariff measures imposed under emergency powers. The administration had previously said it would use alternative tools if limits were placed on tariff action under the International Emergency Economic Powers Act.
For India, the concern is that any Section 301-linked tariff outcome could reduce the commercial value of the trade pact. Exporters in sectors such as textiles, apparel, chemicals, leather goods, gems and pharmaceuticals would be watching closely because these industries are sensitive to tariff differences in the US market.
Background
India and the United States have been negotiating a broader Bilateral Trade Agreement since February 2025. In February 2026, both sides announced an interim framework intended to open markets, reduce tariff and non-tariff barriers, and support supply chain resilience.
The White House fact sheet said the United States and India planned to work towards finalising the interim agreement and eventually concluding a mutually beneficial bilateral trade agreement. It said the negotiations would cover remaining tariff barriers, non-tariff barriers, technical barriers to trade, customs and trade facilitation, services and investment, intellectual property, labour, environment, government procurement, and trade-distorting practices.
The February framework also included wider economic commitments. India said it intended to purchase USD 500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over five years. Both countries also committed to increase trade in technology products, including goods used in data centres, and to expand technology cooperation.
The agreement remains politically and economically sensitive for both sides. Washington wants greater access for US industrial and agricultural exports, while New Delhi is seeking lower barriers for Indian exports and protection for sectors that face strong domestic pressures.
What’s next
The New Delhi talks are expected to determine whether both sides can settle the remaining tariff issues and move towards signing the first tranche of the agreement. US Trade Representative Jamieson Greer could also visit India once the broad contours are finalised.
If both sides resolve the tariff question, the India US trade pact could move from framework negotiations to implementation, with the final shape depending on how Washington handles Section 301-related relief.
Published in SouthAsianDesk, June 2, 2026
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