‘Every country has national interests’: What Marco Rubio’s trade message means for India

US Secretary of State Marco Rubio said India and the US are close to finalising a trade agreement. The challenge, for India, is to secure competitive access to the American market while protecting domestic economic priorities.

Indian exporters want predictable access to the US market and treatment that allows them to compete with suppliers from countries such as Bangladesh, Vietnam and Indonesia. Washington, meanwhile, is seeking greater access to India’s market and a more balanced trading relationship.

In an exclusive interview with Network18 Group Editor-in-Chief Rahul Joshi in Mumbai on Tuesday, Rubio said the negotiations were down to technical details and precise wording.

“I think we are down to some technical details that need to be worked out,” Rubio said.

After meeting External Affairs Minister S Jaishankar in Mumbai, Rubio also described the countries as “very, very close” to finalising the agreement, with a small number of issues left to resolve. The discussions covered energy, technology and defence cooperation.

India wants an advantage over competing exporters

India’s Foreign Minister Subrahmanyam Jaishankar attends the Freedom 250 reception at the Jio World Convention Centre in Mumbai on October 20, 2026. (Photo/AFP)

India has made clear that a lower US tariff rate alone will not be enough. New Delhi wants its exporters to compete effectively with suppliers from countries such as Bangladesh, Vietnam and Indonesia.

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On October 15, Trade Secretary Rajesh Agrawal said the first phase of the proposed agreement had been finalised and was undergoing legal drafting. Commerce and Industry Minister Piyush Goyal said India wanted a comparable or competitive advantage over rival exporters before the agreement was operationalised.

Reuters reported that India was seeking preferential market access and greater tariff stability under the proposed agreement.

A lower tariff can make Indian goods more competitive, but the advantage depends on the duties faced by rival suppliers, product-specific tariffs and the ability of manufacturers to meet buyers’ requirements.

If an American retailer can source a comparable product more cheaply from another country, Indian suppliers may lose orders even when their production costs are competitive.

Rubio acknowledged that both countries would continue to pursue their own interests during negotiations.

“The foreign policy of the United States, the trade policy of the United States, is driven by a recognition that every country has national interests,” he said.

He added that an agreement should work for both sides, even if neither gets everything it wants.

“There are things that you’re not going to like in it, but the preponderance of it is good for you,” Rubio said.

Export growth does not tell the whole story

Indian Prime Minister Narendra Modi gestures during a joint press conference with US President Donald Trump at the White House in Washington, D.C., US. File/Reuters

India’s merchandise exports to the US rose 11.1 per cent to $50.81 billion during April-September 2026, compared with $45.73 billion in the same period a year earlier, according to government data.

Imports from the US increased about 26 per cent to $32.33 billion from $25.66 billion. India’s merchandise trade surplus with the US consequently narrowed to about $18.49 billion, compared with $20.07 billion a year earlier.

The figures show that bilateral goods trade continued to expand despite tariff uncertainty. But the headline export growth needs closer examination.

India’s exports to the US jumped 48 per cent year on year to $8.02 billion in September. Exporters had brought forward shipments amid the threat of additional tariffs, while a favourable base effect also contributed to the increase.

Front-loading can lift shipments in the short term without indicating stronger underlying demand. When companies dispatch goods earlier to avoid a possible tariff increase, subsequent months may not sustain the same pace of growth.

The wider trade relationship also helps explain Washington’s focus on market access. The Office of the US Trade Representative estimates that total US goods and services trade with India reached $239.6 billion in 2025. Goods trade amounted to $149.1 billion, with US exports of $45.4 billion and imports from India of $103.8 billion. The US goods trade deficit with India was $58.4 billion.

US services trade with India totalled an estimated $90.4 billion in 2025, including $42.9 billion in US exports and $47.6 billion in imports.

Textile exporters are already changing strategy

The effects of tariff uncertainty are visible in India’s textile and apparel industry, where exporters are trying to reduce their dependence on the US market.

Companies were expanding into markets such as Canada, Japan, the European Union, the UK and Australia as American orders and tariff conditions remained uncertain.

Pearl Global Industries, for example, reduced the US share of its revenue from 85 per cent in financial year 2022 to below 50 per cent in FY26, while increasing overall revenue from $200 million to $550 million. Welspun Living has also expanded its business beyond the US.

Diversification can reduce a company’s exposure to a single market, but it does not eliminate the importance of US buyers. The report said India’s textile and apparel exports declined from $36.6 billion in FY25 to $35.7 billion in FY26. It also cited exporters who reported sharp falls in US shipments during periods of peak tariff pressure.

Finding new customers also takes time. Companies may need to establish relationships, meet different product requirements and build distribution channels before another market can replace the scale of their US business.

A trade agreement that improves India’s relative tariff position could help exporters regain orders. But the outcome will depend on the actual rates, the treatment of competing suppliers and the stability of the arrangements.

Exporters also face measures beyond the broad reciprocal tariff framework. In July, the Commerce and Industry Ministry said the US had imposed an additional 10 per cent duty under Section 301 measures linked to forced-labour concerns. The ministry estimated that around 45 per cent of India’s exports to the US remained outside the scope of that additional duty, including generic pharmaceuticals, smartphones and certain other products. It also said a textile-specific mechanism had yet to be established and operationalised.

What the February framework offers

The starting point for the negotiations is the framework announced by India and the US on February 6, 2026. It outlined an interim trade agreement and reaffirmed both countries’ commitment to negotiating a broader bilateral trade agreement.

Under the framework, the US said it would apply an 18 per cent reciprocal tariff rate to specified Indian-origin goods, including textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, artisanal products and certain machinery. Subject to the successful conclusion of the interim agreement and the relevant conditions, it also proposed removing reciprocal tariffs on a range of goods, including generic pharmaceuticals, gems and diamonds and aircraft parts.

India, meanwhile, agreed under the framework to eliminate or reduce tariffs on US industrial goods and a range of American food and agricultural products. The two sides also committed to addressing non-tariff barriers, establishing rules of origin and expanding cooperation on supply chains and technology.

The proposed concessions could have different effects across industries. Lower barriers can make imported goods cheaper for consumers and businesses, while improved access to the US can help Indian manufacturers expand sales. The implications for domestic producers will depend on which products receive preferential treatment and how the final commitments are implemented.

The framework also stated that India intended to purchase $500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over five years. The countries proposed a significant increase in trade in technology products, including graphics processing units and other goods used in data centres.

Russian oil adds another layer of uncertainty

US Secretary of State Marco Rubio speaks during the Freedom 250 reception at the Jio World Convention Centre in Mumbai on October 20, 2026. (Photo/AFP)

Trade negotiations have also been affected by differences over India’s purchases of Russian crude oil and Washington’s use of sanctions and tariffs.

On October 19, US President Donald Trump invoked a national-interest waiver from measures under the Graham Act that could have exposed countries buying Russian oil, including India, to additional penalties. The move eased the immediate threat of tariffs of up to 100 per cent linked to India’s Russian oil purchases.

Rubio said sanctions can affect countries that do business with Russia, not just Russia itself. He argued that Washington must balance its position on the war in Ukraine against the wider economic consequences of its decisions.

For India, the issue has direct implications for energy costs and supply security. Oil-sourcing decisions affect refiners, transport costs and the broader economy, while the prospect of additional trade penalties can create uncertainty for exporters.

The waiver may ease immediate pressure, but it should not be treated as a permanent resolution of the wider dispute. Its scope is separate from the terms of a trade agreement, and future policy decisions could affect the cost of doing business with the US.

This leaves both governments with an economic and diplomatic challenge. Washington wants to maintain pressure on Russia while strengthening commercial ties with India. New Delhi wants to preserve flexibility over energy sourcing while improving access to the American market.