NEW DELHI: India on Friday denied reports that it was holding off bilateral engagement or delaying a trade deal with the United States, saying discussions between the two countries are continuing for a "mutually beneficial agreement."
"We have noted a media report regarding ongoing trade talks with the US. It is denied that there is any hold off in bilateral engagement. It is reiterated that the two sides remain engaged for a mutually beneficial trade agreement," the commerce ministry said in a statement.
The clarification came after a Reuters report claimed that India may delay signing a trade deal with the United States for several months while adopting a "wait and watch" approach on tariff policy.
According to the report, four government officials familiar with the matter said the timeline for finalising the agreement could slip by several months. However, the commerce ministry rejected the claim, reiterating that engagement between the two sides remains ongoing.
The development comes amid fresh trade investigations launched by the administration of Donald Trump into "unfair trade practices" by around 60 economies, including India.
The probe focuses on concerns such as forced labour in imports. The United States has also initiated separate investigations into excess industrial capacity among 16 major trading partners.
Officials said the Section 301 investigation could potentially lead to new tariffs on several economies, including India, China, the European Union, Japan, South Korea and Mexico, as early as this summer.
What the report said?
According to the report, negotiations lost momentum after the US Supreme Court struck down Trump’s tariffs in late February. Since then, there have been no substantive talks between the two sides, partly because Washington has been focused on the escalating conflict involving Iran.
India had initially hoped to sign an interim trade deal in March, followed by a comprehensive agreement later in the year.
The earlier understanding came after Trump agreed in early February to ease steep US tariffs on Indian imports in exchange for several commitments from New Delhi, including reducing purchases of Russian oil, lowering duties on American goods and pledging to buy $500 billion worth of US products.
However, India did not halt Russian oil imports, though purchases slowed somewhat. US officials are now urging New Delhi to increase imports to help ease the global energy crunch triggered by the ongoing conflict.
"We are not in a hurry to sign any deal," the source told Reuters. "The new investigation is a pressure tactic to force countries into signing deals after the court order. It's a spanner in the works," it added
The report noted that India would largely adopt a "wait and watch" approach as US tariff policy evolves.
Earlier, Trump had announced a 25% punitive tariff on India but later dropped it after saying New Delhi had agreed to curb Russian crude imports. India, however, only said it would diversify its supply sources. At one point, the overall tariff on Indian goods had reached about 50%, among the highest globally.
US expects India to honour commitments
Meanwhile, US Ambassador to India Sergio Gor said Washington expects countries that have negotiated trade deals with the United States to follow through on their commitments.
"So we fully expect the nations that we've made deals with to honour those deals," he said at the India Today Conclave on Friday.
"I think India will do that because ... it's not just about honouring it - it's a win-win situation," he added.
Following the Supreme Court ruling, the Trump administration imposed a temporary 10% tariff on imports from all countries until July 24.
Under the earlier framework for an interim agreement, Indian exports to the United States were expected to face duties of around 18%. However, New Delhi is now left with a question on seeking clarity on whether Washington will return to that rate or apply a different tariff level.
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