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India has rejected the possibility of a quick trade agreement with the United States, choosing to hold out for a deal that better serves its long-term economic interests, Reuters reported, citing officials and analysts.
The talks stalled as Washington did not provide assurances on some of India’s key demands, including a tariff advantage over competing economies such as China and protection from additional US levies after the agreement, the report said.
“Our position is clear — we don’t intend to rush into a deal that is not on favourable terms or compromise on red lines like ceding ground on agriculture,” the official told Reuters.
The US has been seeking faster trade concessions from India as President Donald Trump prepares to introduce new tariff measures later this month. However, New Delhi has indicated that it is willing to accept short-term uncertainty rather than sign an agreement that does not provide sufficient benefits.
A day after talks with Greer, Commerce and Industry Minister Piyush Goyal said the US trade deal would move ahead only if it provided an advantage to India, signalling that New Delhi was not under immediate pressure to compromise.
India gains confidence from economic resilience
India’s stronger economic position has allowed the government to adopt a more cautious approach in negotiations, analysts told Reuters.
The country’s exports have remained resilient despite global disruptions, including the impact of the West Asia conflict. India’s overall goods exports increased around 15 per cent year-on-year during April-June, helped by higher petroleum shipments, officials told Reuters.
Exports to Gulf markets, which were affected by shipping disruptions, recovered to pre-conflict levels, rising to $5.3 billion in May from $2.62 billion in March.
Shipments to the United States also increased, reaching $17.29 billion during April and May.
India has simultaneously expanded its trade partnerships with other major economies. The India-UK free trade agreement is scheduled to take effect this month, while negotiations with the European Union are expected to conclude by early next year.
“Indian negotiators have gained some leverage in the talks, given its strong economy, diversification initiatives with other partners, and its strategic standing in the world,” Wendy Cutler, senior vice president at the Asia Society Policy Institute and a former US trade official, told Reuters.
Lower economic risks strengthen India’s hand
Improving economic conditions have further reduced pressure on New Delhi to accept an early agreement.
Goldman Sachs economist Santanu Sengupta told Reuters easing oil prices following an interim US-Iran peace agreement had improved India’s economic outlook.
The investment bank raised its 2026 growth forecast for India to 6.8 per cent and lowered its inflation and current account deficit estimates, giving the government greater flexibility in trade negotiations.
A weaker rupee has also improved the competitiveness of Indian exporters.
Trade analysts said India is also factoring in the possibility that some proposed US tariff measures could face legal or political challenges.
A group of 22 Democratic state attorneys general has already filed objections against the Trump administration’s proposed tariffs linked to forced-labour investigations.
Agriculture remains India’s key red line
Domestic political considerations are also shaping India’s position.
The Modi government has repeatedly maintained that any trade agreement must protect farmers and small businesses, two politically important constituencies.
India has historically been cautious about opening its agriculture sector to foreign competition, citing concerns over farmer livelihoods and food security.
Ajay Srivastava, founder of the Global Trade Research Initiative and a former trade negotiator, said India’s decision to delay the agreement could be more beneficial than accepting commitments that may create long-term costs.
“India realises that delaying — or even abandoning — a rushed deal may be more prudent than locking into obligations whose costs could far exceed any temporary tariff relief,” Srivastava told Reuters.
For now, India and the US remain engaged in negotiations, but New Delhi’s approach suggests it is prioritising strategic gains over a quick agreement. The government appears willing to wait for a trade pact that provides meaningful market access, protects sensitive sectors and strengthens India’s position in global trade.
