India-US trade deal can be finalised after tariff probe concludes, official says

India is pushing for preferential new tariffs from the United States as part of talks to finalise an interim trade deal with Washington, an Indian trade official said on Monday.

The U.S. and India reached an initial understanding on a trade deal in February, but negotiations slowed after U.S. President Donald Trump's sweeping tariff measures were struck down by the U.S. Supreme Court.

The U.S. has since proposed an additional tariff of 12.5% on imports from India, and other countries, due to what Washington says is these countries' use of forced labour. It is also looking at imposing a separate tariff on India, claiming India has excess capacity in industries such as textiles and is exporting too much to the United States, damaging U.S. industry.

"Once we have that tariff, we can finalise a trade deal with the U.S. But obviously the rate has to be competitive with direct competitors," the Indian trade official, who was speaking on condition of anonymity, told reporters.

India would also seek an assurance from the U.S. that it will not be subjected to additional tariffs in future after the deal, the official said.

The official did not wish to be named as talks between the two nations over the deal are confidential. India's trade ministry did not immediately respond to an e-mailed request for comment.

Bilateral trade talks gathered pace last week as a U.S. delegation led by Assistant U.S. Trade Representative for South and Central Asia Brendan Lynch held three days of talks with Indian trade officials in New Delhi.

Last week, India's trade minister Piyush Goyal said the two sides were moving swiftly toward finalising the first tranche of ​a bilateral trade agreement that could be concluded ‌by mid-July.