India and the United States are moving closer to finalising the first phase of their Bilateral Trade Agreement, with officials indicating that most major issues have been resolved. However, tariff arrangements, agricultural market access and safeguards against future trade measures remain important parts of the negotiations.
The trade discussions come as India’s merchandise trade deficit widened sharply in October, despite record exports, highlighting the pressure from higher gold and crude oil imports.
India and US Near Final Stage of Trade Negotiations
Commerce and Industry Minister Piyush Goyal described the proposed agreement as one of the best trade deals India is negotiating, saying Indian products of interest would receive preferential market access compared with similar products from countries at comparable levels of economic development.
The two countries finalised a framework for the first phase of their Bilateral Trade Agreement earlier in 2026. A US trade delegation visited New Delhi in early November for further discussions, including technical work on customs and trade facilitation.
The first phase is expected to cover goods, with services trade to be addressed separately. However, changes in the US tariff regime and new trade investigations have complicated the negotiations.
India is seeking clarity on the final tariff structure and preferential treatment compared with regional competitors. Agriculture and dairy remain sensitive issues, with New Delhi resisting demands for wider access to US genetically modified crops, dairy products and other agricultural goods.
India is also seeking safeguards against sudden future tariff increases, including consultation mechanisms. The United States has reportedly assured India that it will face lower tariffs than comparable countries under the proposed agreement. However, the final terms have not been formally announced.
Officials from both countries have described negotiations as being in their final phase, but the timeline for signing remains uncertain.
India’s Trade Deficit Widens to $39.88 Billion
India’s merchandise trade deficit widened to $39.88 billion in October 2026, compared with $30.21 billion in September, according to government data. Merchandise imports reached a record $89.35 billion, exceeding record exports of $49.47 billion.
Comparison compiled from figures stated in this article.
Gold imports nearly tripled to $5.51 billion from $1.8 billion in September, as jewellers and consumers increased purchases ahead of Diwali. Higher crude oil import costs also contributed to the increase, with India importing approximately 85% of its crude oil requirements.
The deficit was wider than Bloomberg’s median forecast of $33.30 billion, although it remained below the October 2025 record of $42.58 billion.
For April to October, merchandise exports increased nearly 22% to $309.06 billion, while imports rose 16% to $527.21 billion. The cumulative merchandise trade deficit stood at $218.15 billion.
Services exports were estimated at $40.51 billion in October against imports of $20.72 billion, generating a surplus of $19.79 billion. Including services, India’s total exports reached $89.99 billion, while the overall trade deficit narrowed to $20.09 billion.
The US remained India’s largest export market, with merchandise exports to the country rising 14.5% to $59.52 billion during April-October. The proposed trade agreement could influence India’s future export competitiveness, although its final impact will depend on the agreed tariff terms and market-access provisions.
Is the India-US trade deal finalised?
No. Negotiations are reportedly in their final phase, but the agreement has not yet been formally signed.
What will the first phase of the India-US trade agreement cover?
The first phase is expected to focus on trade in goods. Services trade is expected to be addressed in a subsequent phase.
What are the main issues delaying the trade agreement?
Tariff arrangements, agricultural and dairy market access, and safeguards against future US tariff changes remain important negotiating issues.
How much was India’s trade deficit in October 2026?
India’s merchandise trade deficit widened to $39.88 billion in October, compared with $30.21 billion in September.
Why did India’s trade deficit widen?
Record imports of $89.35 billion, including a sharp increase in gold purchases and higher crude oil import costs, outpaced merchandise exports of $49.47 billion.
