India-US trade deal nears finalization amid potential tariff challenges

India and the United States are nearing the finalization of a bilateral trade deal, with Commerce Secretary Rajesh Agrawal stating the agreement is ‘more or less’ finalized. Both nations are currently working on a framework to establish preferential market access to bridge the gap between India’s most-favoured-nation tariffs and the US’s executive tariff system.

However, the deal faces potential complications from US legislative and policy developments. The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which passed the Senate with an 86-11 vote, proposes tariffs of up to 100 percent on goods from major importers of Russian crude oil and natural gas. As the second-largest buyer of Russian crude, India could be significantly impacted.

Additionally, a proposal by Donald Trump to impose 100 percent tariffs on generic medicines in 2028—unless manufacturing is reshorred to the US—poses a risk to India’s pharmaceutical industry, which relies heavily on the US market.