Key facts
- India seeking tariff advantage over China, Vietnam, Bangladesh in US deal
- Trade minister confirmed preferential access is a key negotiating demand
- 90-day US tariff pause is the diplomatic window for negotiations
- Farm groups and trade unions have written to PM Modi opposing the FTA
India is pressing the United States for preferential tariff rates that would give Indian goods a competitive advantage over rivals including China, Vietnam, and Bangladesh, as negotiations toward a bilateral trade agreement intensify. Trade Minister Piyush Goyal confirmed the approach, signalling that New Delhi sees the current US tariff environment as a strategic opening to entrench India's position in American supply chains.
The push is timed around the 90-day pause the Trump administration granted on its sweeping reciprocal tariffs, creating a diplomatic window for countries to negotiate terms. India, which faces a 26 percent tariff under the US framework, is seeking to bring that figure down while simultaneously ensuring that key competitors do not get a better deal that would undercut Indian exporters.
Sectors with the most to gain include textiles and garments, pharmaceuticals, electronics, and engineering goods — all areas where India competes directly with Vietnam and Bangladesh in the US market. A tariff differential of even a few percentage points can be decisive in price-sensitive categories.
Farm outfits and trade unions have written to Prime Minister Modi urging caution, warning that any FTA with the US could expose Indian agriculture and small industries to unfair competition. The government faces the challenge of securing market access gains while managing domestic political sensitivities around sectors that employ tens of millions of Indians.