The India–US trade deal is delayed mainly due to Washington’s ongoing Section 301 investigations into unfair trade practices, including forced labour concerns, News18 reported.

Although negotiations between New Delhi and Washington are essentially complete, the agreement cannot be signed until these probes conclude, which could take another three to four months.

The trade deal between India and the United States has reached an advanced stage, with both sides agreeing on the substance of the agreement. A senior US official confirmed that “the deal… is there. We literally have the paper,” indicating that the text is ready. However, the signing is being held up by procedural matters in Washington, specifically the completion of Section 301 investigations.

Section 301 of the US Trade Act allows Washington to impose tariffs or retaliatory measures against countries engaged in unfair trade practices. One major investigation covering 60 countries, including India, is expected to conclude soon.

Once this and other probes are finalised, progress on the India deal and other trade agreements is expected to accelerate. The official suggested a timeline of three to four months for completion.

India has been negotiating with the US to expand market access and reduce trade barriers. Both governments see the deal as a way to strengthen economic ties and provide greater certainty for businesses. Commerce Secretary Rajesh Agrawal has emphasised that while Section 301 investigations are separate, the trade deal could provide a pathway to address these issues comprehensively.

The delay is not due to disagreements between India and the US but rather Washington’s domestic processes. India has already submitted its responses to the US Trade Representative, contesting the proposed tariffs and arguing that the evidence against it is insufficient. New Delhi has offered dialogue to address specific concerns, particularly regarding allegations of forced labour in supply chains.

Washington has proposed new tariffs of up to 12.5% on imports from dozens of countries, including India, over forced labour concerns. India has asked the US to reconsider, pointing out that no economy-specific case has been made against it. Public hearings on these tariffs were held earlier this month, and final decisions are expected soon.

Separately, President Donald Trump announced that generic drugs imported into the US will remain exempt from tariffs for two years starting 1 August. After that, they will face tariffs of 100% for one year and 200% thereafter.

This decision has major implications for India’s pharmaceutical industry, which is heavily reliant on the US market. In 2025, India exported $9.7 billion worth of generic medicines to the US, accounting for nearly 38% of its total pharmaceutical exports of $25.8 billion.

India is the most exposed among exporters of generic medicines to the US. The proposed tariff escalation could severely impact its pharmaceutical sector, raising costs and reducing competitiveness. This adds urgency to the trade deal, as India seeks to secure favourable terms to protect its industries.

The framework agreement is reportedly ready and will be signed at the “right time.” Both sides have held multiple rounds of talks since the US Supreme Court struck down reciprocal tariffs earlier this year.

The deal is expected to strengthen supply chains, boost investor confidence, and provide long-term stability in bilateral trade relations.

Agencies