Piyush Goyal said on October 26 that India and the United States "have concluded most of the discussions and are fine-tuning" their bilateral trade agreement2, 5. He spoke at the India-Netherlands Business Forum in The Hague, during a visit with a business delegation2.
A day earlier, BusinessLine reported from sources that the interim deal is stuck. New Delhi will not accept the 18% tariff Washington wants to keep, and is inclined to wait until the US mid-term elections are over3.
The two accounts fit together. Negotiators are still working. A team led by Commerce Secretary Rajesh Agrawal met US officials in Washington from October 15 to 17, and Goyal met US Trade Representative Jamieson Greer in Milwaukee on October 12. But the agreement has not been finalised or signed, and no legal text has been released6. A legal text was expected by mid-March2.
The rate at the border today is 10%
For a US importer clearing Indian goods, the number to plan on is neither last year's 50% nor the 18% on offer. It is 10%.
Since July 24, 2026, goods from about 60 economies, India included, have carried an extra Section 301 duty tied to forced-labour enforcement. The rate is 10% or 12.5% depending on origin, and it sits on top of the duty an importer already pays7. BusinessLine's sources and a Rubix Data Sciences report both put India's rate at 10%3, 1. USTR added exemptions before the start date for items including pharmaceuticals, semiconductor manufacturing equipment, certain seeds, fertiliser and pesticide inputs, and used clothing7.
Indian goods faced far more in 2025. The 50% rested on reciprocal tariffs imposed under emergency powers. In February 2026 the Supreme Court held in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not let the president set tariffs, and the reciprocal duties fell8, 9. Customs has refunded duties paid under them8. A 10% global tariff under Section 122 of the Trade Act of 1974 ran for 150 days, to July 24, 20269. The Court of International Trade then ruled it illegal, and that case is under appeal9.
Sectoral duties remain. Articles made almost entirely of steel, aluminium or copper pay 50% under Section 232, and imported cars and auto parts pay 25%9.
Product by product
| Product group | Extra US duty today | February framework |
|---|---|---|
| Most Indian goods, including textiles and apparel | 10% Section 301 levy3, 1 | 18% rate once concluded2, 3 |
| Generic pharmaceuticals | Exempt from the levy7 | Zero on conclusion2 |
| Gems and diamonds | 10% levy3 | Zero on conclusion2 |
| Aircraft parts | 10% levy3 | Zero on conclusion2 |
| Steel and aluminium articles | 50% Section 232 duty9 | Not in the zero list2 |
| Cars and auto parts | 25% Section 232 duty9 | Not in the zero list2 |
The zero-duty promise names generic pharmaceuticals, gems and diamonds, and aircraft parts2. No separate relief for shrimp, seafood or apparel has been announced.
Why 18% looks worse than no deal
On February 7, Goyal presented the framework as a cut in the US tariff on Indian goods to 18% from 50%2. Then the Supreme Court removed the reciprocal tariffs that made up much of the 50%, and the comparison changed3, 8.
"At this moment, it is not economically feasible for India to accept tariffs greater than the current 10 per cent imposed on its exports under Section 301," a source told BusinessLine3. Even an American offer of 14% or 12% would not clear that bar while the levy is 10%, the source said3.
India also wants assurances on future penalties. These include possible duties under Russia sanctions legislation or a Section 301 excess-capacity investigation. New Delhi wants its exporters left better placed than rivals in Vietnam, Bangladesh and Indonesia, and no new tariffs after a signature. Washington has not answered satisfactorily, the sources said3. Politically, signing before the vote would mean defending farm concessions designed to appeal to voters in Republican-leaning states3.
What India would give
India's commitments in the framework are broad. It would eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers' grains, tree nuts and fruit2. It would address barriers to US medical devices, remove restrictive import licensing for US information and technology products, and work on barriers to digital trade2. It also said it intends to buy $500 billion of US energy, aircraft and aircraft parts, precious metals, technology products and coking coal over five years2. Goyal said the interim agreement protects Indian farmers' interests2.
For Indian buyers, those pledges would mean lower duties on US machinery, chemicals, medical devices and computer hardware, plus easier licensing. None of it applies yet, because nothing has been signed6. The joint statement does allow either country to modify its commitments if the other changes the agreed tariffs2.
What to assume for 2027
Plan on the 10% levy, not on zero and not on 18%. It is the rate in force, it has no announced end date, and it is the base case for a 2027 landed cost3, 7.
Treat 18% as a risk rather than a saving. If a deal lands at 18%, goods outside the zero-duty list would pay more than they do now, which is the comparison made by the sources BusinessLine cited2, 3.
No refund mechanism has been announced for duties paid before a deal takes effect2, 3. The refunds that have happened followed the court ruling on the emergency tariffs, not a negotiation8. Where US importers re-export goods, duty drawback can recover up to 99% of the Section 301 duty, and claims can cover imports from the previous five years7.