Is a US–India trade deal finally close? What diaspora businesses should know

Last week brought the strongest signals yet that the United States and India are close to a trade deal. In Mumbai on 20 October 2026, US Secretary of State Marco Rubio said the two countries were “very, very close”, adding: “I would say we are about as close as you can be without having an executed agreement.” In the Oval Office the same week, President Trump said the two sides were nearing an understanding and that “it’s going to be a much different kind of deal than we’ve done”.

But nothing has been signed, no final terms have been published, and Indian ministers have been more cautious. For diaspora businesses that trade between the two countries, here is what we know, what we don’t, and what to do in the meantime.

What was said last week

• 16 October: President Trump signed an executive order waiving threatened US sanctions, including possible tariffs of up to 100%, on countries that keep buying Russian oil. India’s Russian oil purchases had been one of the main sources of friction.
• 20 October: Rubio, in Mumbai, said only a small number of issues remain and a deal could come soon. He met External Affairs Minister S Jaishankar to discuss energy security and defence.
• 21 October: Rubio went on to Jamnagar for talks with Reliance Industries about refining more Venezuelan crude, a sign of how closely energy is tied to the trade talks.
• This week: Trump said India wanted a deal and that it would be different from earlier US deals, but gave no details or timeline.

How we got here

In August 2025 US tariffs on most Indian goods reached a combined 50%: a 25% “reciprocal” tariff plus a 25% penalty linked to India’s purchases of Russian oil.

In early February 2026 the two governments announced a framework for the first phase of a trade agreement. Under it:

• the US reciprocal tariff on Indian goods would fall to 18%, and the Russian-oil penalty was removed;
• some Indian exports would face no reciprocal tariff at all, including gems and diamonds, pharmaceuticals, smartphones, tea, coffee, some fruits and handicrafts;
• India would give limited access to some US farm goods, such as tree nuts, fruit, soybean oil and wine and spirits, and cut duties on items such as cosmetics and medical devices;
• dairy, rice and millets stayed protected.

Then, on 20 February 2026, the US Supreme Court struck down most of the tariffs the framework was built around, ruling that the President had exceeded his authority. The US moved to a temporary 10% tariff under a different law, and the legal basis for US tariffs has shifted again since. That is a big part of why the February framework was reopened rather than signed.

What is still in the way

• Agriculture: India is reluctant to expose its farmers to more foreign competition, and dairy remains especially sensitive.
• Energy: Washington wants India to buy more American energy.
• The final tariff rate: India wants a rate that keeps its exporters competitive with rivals such as Vietnam.
• Other friction: reports also point to a US investigation into alleged unfair trade practices and Washington’s warmer ties with Pakistan.

The public messages differ. Finance Minister Nirmala Sitharaman said on 5 October that the talks had reached a “plateau”, with little room for further concessions. Commerce Minister Piyush Goyal says the first tranche is going through “the final contours, the legal drafting”, but that it will not be put into operation until India has an edge over competing countries. US Trade Representative Jamieson Greer has said an announcement is not “imminent”.

Who would feel it most

• Exporters from India to the US: goods exports to the US rose 21% year on year in August, to $8.3 billion, so the market is already large. If the February terms survive, sectors on the zero-tariff list (gems and jewellery, pharmaceuticals, smartphones, tea, coffee and handicrafts) stand to gain most.
• US businesses selling into India: food and drink, cosmetics and medical device firms could see lower Indian duties, though farm access is likely to come with limits.
• Services and IT firms: the published framework is mostly about goods. Nothing announced so far changes the rules for services or business visas.
• Anyone pricing in dollars and rupees: economists warn that higher tariffs, if talks fail, would weigh on India’s growth and on a rupee that is already weak.

What to do now

1. Know today’s rate. Find the US tariff code (HTS) for each product you ship and check the duty that applies now. It has changed several times this year, so don’t rely on figures from earlier in 2026.
2. Don’t price in the deal yet. Quote and plan on current rates until terms are signed and published.
3. Protect your contracts. For longer contracts, agree who pays if tariffs go up or down, and when prices can be reviewed.
4. Get your origin records in order. Both sides have said they want strict rules of origin, so supplier declarations and bills of materials will matter when lower rates arrive.
5. Watch the official sources listed below, not just headlines. Statements that a deal is close have been made several times since 2025.

How it compares with India’s other deals

India’s agreement with the UK is already working: it came into force on 15 July 2026, and 99% of Indian exports now enter the UK duty-free. Our guide, The India–UK trade deal is now in force, explains how to claim the lower rates. India and the European Union concluded negotiations on their agreement in January 2026; it still has to be signed and ratified before it takes effect.

Where to start

If you trade between India and the US, or are thinking about it, India Grows can help you find partners on both sides. Browse business deals from the Indian diaspora, post your own, or find professionals such as customs brokers, accountants and lawyers who work across both countries.

Official sources

• Office of the US Trade Representative: India
• US International Trade Commission: Harmonized Tariff Schedule search
• Government of India: Department of Commerce

Last updated 25 October 2026. Talks are ongoing and terms may change; we will update this article when an agreement is signed. Based on public statements reported by AFP, Scroll and India Briefing.