India has rejected a quick trade agreement with the United States in recent negotiations, choosing instead to hold out for more favourable terms, Reuters reported.

Prime Minister Narendra Modi’s government has drawn confidence from new trading partnerships, eased economic risks, and political gains at home, according to officials and analysts.

Despite months of discussions, the two nations failed to finalise an interim trade agreement during U.S. Trade Representative Jamieson Greer’s visit to New Delhi last month. Expectations had been high that a limited deal was within reach, but consensus was not achieved.

The sticking points remain Washington’s refusal to provide assurances on India’s key demands. New Delhi insists on a tariff advantage over competitors such as China and guarantees against new U.S. levies after any deal. An Indian government official stressed that India would not rush into an agreement that compromised its red lines, particularly in agriculture.

Washington had hoped for swift concessions from India, especially as President Donald Trump prepares new tariffs likely to take effect later this month. India’s refusal risks higher levies on its exports and prolonged uncertainty for businesses. A day after talks with Greer, Trade Minister Piyush Goyal reiterated that the deal would not be implemented unless India secured an advantage, signalling a hardened stance.

Currently, most Indian goods face a 10% U.S. tariff. However, the Trump administration is expected to introduce steeper tariffs through probes into excess industrial capacity. India has denied U.S. allegations of surplus capacity. Washington has already proposed new tariffs of up to 12.5% on dozens of nations, including India, citing forced labour concerns.

U.S. officials have argued that India must earn preferential treatment by making concessions of its own. Negotiations remain confidential, with both sides declining to comment publicly. A U.S. official noted that Washington continues to engage with India and expects an agreement eventually, though no timeline was offered. The same official described India’s approach as slow and bureaucratic, suggesting no quick resolution.

White House spokesman Kush Desai stated that the Trump administration continues to engage productively with Indian officials to finalise a historic trade deal that prioritises American interests.

India’s strengthened position is underpinned by rising exports, new trade deals, and eased economic risks. Between April and June, overall goods exports rose about 15% year-on-year, buoyed by petroleum shipments despite disruptions from the war on Iran. Exports to Gulf countries recovered to pre-war levels, while exports to the United States edged up to $17.29 billion in April and May.

India is also broadening access to developed markets. A free trade pact with the United Kingdom is set to take effect this month, while an agreement with the European Union is expected early next year. Analysts such as Wendy Cutler of the Asia Society Policy Institute noted that India’s strong economy, diversification initiatives, and strategic standing have given its negotiators leverage.

The interim U.S.-Iran peace deal has eased oil prices, improving India’s economic outlook. Goldman Sachs has raised India’s 2026 growth forecast to 6.8% and lowered inflation and current-account deficit estimates, suggesting New Delhi has more room to hold out for better terms. A weaker rupee has also boosted exporters’ competitiveness.

India is calculating that some U.S. trade measures may face legal or political setbacks. Twenty-two Democratic state attorneys general have already filed objections to Trump’s proposed tariffs linked to forced labour. Analysts believe this legal uncertainty, combined with Modi’s recent state election victories, has emboldened India to resist a rushed deal.

Senior leaders of Modi’s Bharatiya Janata Party have publicly argued that trade agreements must protect farmers and small businesses, constituencies that New Delhi has long shielded in negotiations. Ajay Srivastava of the Global Trade Research Initiative observed that India recognises delaying or even abandoning a rushed deal may be more prudent than locking into obligations whose costs could outweigh temporary tariff relief.

India’s negotiating stance reflects a broader strategy of resilience, diversification, and political confidence, even as risks of higher tariffs and business uncertainty loom.

Agencies