Officials said India remains committed to the agreement but given the changed circumstances around the tariffs, it has to be seen how the deal is structured and what issues are to be addressed. “So the agreement will have to be recalibrated, redrafted…that amount of change will take place from their side,” said an official.
“We are engaging with them on the contours, limits and commitments which the US will give us and the comparative advantage and commitment we get. The trade-off from the other side is something that we like to hear from them,” the official said.
The visit to Washington follows a 40-minute phone call between Prime Minister Narendra Modi and US President Donald Trump on Tuesday.
Another official said the team is going with an “open mind”.
“Every other country is now recalibrating its earlier agreement, so India is also looking at what will be a legal agreement and the trade-offs,” said the official, adding that “In our case, since the agreement has not been signed and announced, we have got the option where we can right now change whatever needs to be changed…and if we sign it, it will not be proper”.
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On February 7, the US removed a 25% penal tariff on India for buying Russian oil and announced to cut the reciprocal tariff to 18% from 25%. The US Supreme Court on February 20 struck down tariffs imposed under the International Emergency Economic Powers Act. However, on February 24, Washington imposed a 10% blanket tariff on all countries for 150 days after the court invalidated the earlier levies.
“We are looking at finalising the legal agreement, which is a logical follow-up of the joint statement released on February 7. There is a need for further discussions and follow-up engagement to take this forward. India and the US will work together to finalise timelines and next steps as part of the ongoing engagement,” commerce secretary Rajesh Agrawal said.
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Exports, 301 issues
China has overtaken the US to emerge as India’s largest trading partner in FY26, with bilateral trade reaching $151.1 billion even as the trade deficit with Beijing widened to $112.16 billion from $99.2 billion in FY25. The US was India’s largest trading partner for four consecutive years till 2024-25. India’s exports to China rose 36.66% to $19.47 billion in FY26 while imports increased 16% to $131.63 billion.
New Delhi’s merchandise exports to the US in FY26 were $87.31 billion, compared with $86.51 billion in FY25. Imports rose to $52.9 billion from $45.63 billion.
Officials said higher imports from the US were driven by energy and LPG shipments from the US, resulting in a marginal narrowing of India’s trade surplus.
“Our trade surplus with the US has gone down,” said the official. The trade surplus declined to $34.4 billion from $40.89 billion in FY25.
The US has also initiated investigations involving several countries, including India, under Section 301 of the Trade Act.
“The US has initiated investigations involving several countries. Both sides will sit together and discuss how these issues need to be structured and addressed,” the secretary said.
Officials added that India has submitted its response to the request for consultations by the US trade representative.