Trade pact ready but signing depends on US tariff architecture: India

India will sign the trade deal with the US only after Washington finalises its tariff framework, Commerce Secretary Rajesh Agrawal said

PGurus Newsdesk

March 16, 2026

Commerce Secretary Rajesh Agrawal says the agreement is ready but will be signed only after the US finalises its global tariff framework

India waits for US tariff framework before signing trade pact

India will sign the proposed trade agreement with the United States only after Washington finalises its global tariff framework, Commerce Secretary Rajesh Agrawal said on Monday.

India-US trade deal awaits tariff clarity

Speaking about the proposed trade pact, Agrawal said the agreement is largely ready but the final signing will take place once the US sets its broader tariff architecture.

“The actual signing of the India-US trade deal will be done when the new tariff framework is in place. We are currently discussing the details with the US,” he said.

The trade framework was first announced in early February, but developments in US tariff policy — including legal challenges to tariffs imposed by Donald Trump — have delayed the process.

Tariff changes and energy trade issues

Under the framework, the US agreed to reduce tariffs on several Indian exports to about 18%. The Trump administration also lifted a 25% levy linked to India’s purchases of Russian oil, though India has continued importing crude from Russia.

India has increased Russian oil purchases in recent weeks after tensions in Iran and the broader Middle East disrupted supply routes through the Strait of Hormuz.

New Delhi has maintained that its energy decisions are based on national interests and do not require approval from other countries.

Trade deficit narrows in February

Agrawal made the remarks while releasing India’s trade data for February.

Government figures showed that exports stood at $36.61 billion, slightly lower than the previous year, while imports surged 24.11% to $63.71 billion.

Despite the jump in imports, India’s trade deficit narrowed to $27.1 billion, lower than the $34.68 billion recorded in January and below analysts’ expectations of $28.8 billion.

Middle East tensions affecting trade

The data comes amid disruptions in global shipping routes caused by the ongoing conflict involving Iran, which has affected transport through the Strait of Hormuz — one of the world’s most important oil corridors.

Rising freight costs and supply uncertainties could push India’s trade deficit higher in the coming months.

India relies heavily on energy imports, sourcing over 80% of its crude oil and around 60% of cooking gas from overseas, much of it from the Middle East.

Agrawal said the crisis has also impacted exports of goods such as rice to countries including Iran, Iraq, Qatar, and Saudi Arabia, and warned that shipments could slow further due to logistical disruptions.

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