Washington DC
The US and India are not “far” from finalizing an interim trade deal, but need to bridge some gaps in negotiations, such as discussions on pulses and the introduction of tariff cuts, according to a US official.
“We are not that far from finalizing an interim trade agreement, but some loopholes remain,” an official told The Hindu in recent days.
Officials in Washington are working out the bulk of trade deals after the U.S. Supreme Court ruled on Feb. 20 that the International Emergency Economic Powers Act (IEEPA), which was the basis for President Donald Trump’s “reciprocal tariffs,” was unlawfully invoked. The administration is now working to reimpose reciprocal tariffs using other legislative tools, including “special” 301 trade investigations led by the Office of the US Trade Representative (USTR).
One of the gaps in the discussions between India and the US, according to the US official, is around pulses, where India is trying to protect the market for this agricultural commodity and the US wants more access to it. Politically, agriculture is a deeply sensitive issue for both countries, with the administration in DC and the government in New Delhi not singing from the same song – or, more literally, “invoices”.
Last month, the White House released an “information sheet” — including the term “certain impulses” in a list of items it said India would reduce tariffs on. This and other contradictions in the joint statement issued by Washington and Delhi have created a political uproar in India. The White House quietly reissued the “fact sheet” — a policy statement, rather than a statement of fact — this time omitting mention of pulses and correcting some other inconsistencies.
However, the US side still seems to be pushing for quick market access. In addition, The Hindu has learned that Washington is seeking to reduce staging (ie speed up the gradual reduction of tariffs) and this is currently one of the gaps in the negotiating positions and is being discussed.
Interviews by The Hindu in recent days suggest that right now, however, trade officials in Washington are not focused on closing loopholes in trade deals, but are busy carrying out special 301 investigations launched in March against dozens of countries, including India, allegedly over manufacturing overcapacity and forced labour.
Farmer’s Pulse: About India and its demand for pulses
While the US has signed a trade deal since the launch of the latest set of 301s, it was with Ecuador (March 13), a country with an economy at least 30 times smaller than India’s and whose bilateral trade with the US is a fraction of US-India bilateral trade.
These surveys – which are conducted annually in various countries – will allow tariffs to be imposed beyond the 10% universal tariff imposed on February 24 under Section 122 of the US Trade Act following a Supreme Court decision. Section 122 rates, which are temporarily applied in the event of a balance of payments problem, may be applied for a maximum of 150 days and may not exceed 15% by law.
Mr Trump said in February he would raise the universal 10% rate to 15%. But that didn’t happen, and officials in DC weren’t sure if it would even happen. A question to the White House about the timing of such a hike remained unanswered. ÚSTR also did not provide information about a possible rate hike when contacted by The Hindu.
Raising that universal tariff to 15% would also complicate Washington’s deals with countries that had reciprocal tariffs below 15%. In addition, the White House has focused on Iran in terms of foreign policy and closing the Department of Homeland Security domestically.
Meanwhile, the countries are busy with another part of the trade agenda: the 14th Ministerial Conference of the World Trade Organization in Cameroon from 26 to 29 March. Contentious topics include e-commerce, where Indian and American positions are not aligned. India has long wanted to end the moratorium on tariffs on various forms of e-commerce (software downloads, digital music, etc.), while the US would like to make it permanent.
Published – 27 March 2026 04:08 IST
