India Likely to Delay Trade Deal With the United States for Several Months

India is set to delay signing a trade agreement with the United States for several months, according to four sources familiar with the matter. The delay comes as the administration of Donald Trump launches a new investigation into the “excess industrial capacity” of several trading partners.

Initial discussions had suggested that the agreement would be signed this month. However, sources say the timeline may now be pushed back due to the changing circumstances. Despite this, U.S. officials remain hopeful that India will honor its earlier commitments.

New Delhi had planned to sign an interim agreement this month and later expand it into a comprehensive trade deal. As part of that understanding, Trump agreed early last month to reduce retaliatory tariffs imposed on Indian goods.

In return, India reportedly made several commitments, including reducing tariffs on American products, purchasing goods worth nearly $500 billion from the United States, and halting oil imports from Russia.

The four sources who disclosed the delay are government officials with direct knowledge of the discussions. They requested anonymity because they are not authorized to speak to the media.

A spokesperson for India’s Ministry of Commerce denied that bilateral talks had been suspended. The spokesperson said both sides had reaffirmed their intention to reach a mutually beneficial trade agreement but did not provide details about when it might be formally signed.

Meanwhile, a White House official said the United States is continuing efforts to finalize the agreement with India.

According to Indian government sources, the momentum of the talks slowed after the Supreme Court of the United States canceled tariffs imposed by Trump late last month. Discussions also stalled as Washington became increasingly focused on the conflict surrounding Iran.

Sources added that India never completely stopped buying oil from Russia. Instead, it had only slowed purchases. Recently, however, U.S. officials have reportedly encouraged New Delhi to increase imports of Russian oil again to help address energy shortages.

The situation has been further complicated by a new U.S. investigation into excess production capacity in the manufacturing sectors of 16 trading partners, including India. The probe was launched under Section 301 of the U.S. Trade Act of 1974.

One source said India is not rushing into signing any agreement and views the investigation as a possible pressure tactic aimed at accelerating the deal.

For now, India plans to monitor how U.S. tariff policies evolve. Earlier, Trump had said New Delhi agreed to reduce imports of Russian crude oil when he lowered punitive tariffs by 25 percent. However, Indian officials say they never made such a commitment and only stated that they would diversify their energy import sources.

If necessary, India may present its position to the Office of the United States Trade Representative. If that is not possible, officials said New Delhi may wait for the outcome of the investigation and could consider approaching the World Trade Organization as an alternative option.

Meanwhile, the U.S. ambassador to India, Sergio Gor, said Trump has several tools available to impose tariffs, including Section 301. Speaking Friday at a conference organized by India Today Media Group, he said the United States expects countries that sign agreements to honor their commitments.