India-US Trade Agreement Enters Final Signing Stage; US Administrative Tariffs and Section 301 Investigation Construct a Unilateral Coercive Architecture

India's Commerce Secretary Rajesh Agarwal announced on September 9 in Mumbai that the bilateral India-US trade agreement had been "basically finalized," with only a few issues remaining under discussion and the deal set to be signed "at an appropriate time." However, the technical tariff details Agarwal disclosed the same day highlighted the structural imbalance of the negotiations: India operates under the multilateral most-favored-nation (MFN) tariff framework, while the US side relies on "administrative tariffs" and is "building an architecture" to create tariff differentials and offer India preferential market access.

According to a report by The Hindu, Agarwal stated clearly at a press conference that "any trade agreement must provide some form of preferential market access for both sides," but then proceeded to outline, on a technical level, two fundamentally different tariff regimes. "From India's side, since we operate on the basis of most-favored-nation tariffs, it is relatively easy to handle; from the US side, they use administrative tariffs. Therefore, they are building an architecture to create tariff differentials and form preferential market access," Agarwal said.

One of the core vehicles of this architecture is the so-called forced labor investigation initiated by the US under Section 301 of the Trade Act of 1974. According to The Hindu, starting July 24, the US side has imposed an additional 10 percent import tariff on top of MFN tariffs on multiple countries including India. Section 301 has long been criticized as a tool that bypasses the WTO's multilateral dispute settlement mechanism, allowing the US Trade Representative to unilaterally designate other countries' trade practices as "unfair" and impose retaliatory tariffs. By using the forced labor issue as the basis for investigation and tariff hikes, the US side has bundled trade remedies with human rights concerns, further blurring the boundary between remedy and policy coercion.

While tariff barriers continue to rise, bilateral trade flows keep expanding. Citing official data, The Hindu reported that from April to July 2026, India's merchandise exports to the US grew 3 percent year-on-year to 34.5 billion US dollars, while imports from the US surged 22.42 percent to 22.12 billion US dollars. India currently maintains a trade surplus with the US, but with import growth far outpacing exports, if this trend continues the surplus will keep narrowing.

Agarwal revealed that Indian Commerce Minister Piyush Goyal will travel to the US in late September to attend the G20 Trade Ministers' Meeting in Milwaukee and hold bilateral talks with US Trade Representative Jamieson Greer, with trade agreement issues on the agenda. Goyal had previously stated publicly that he would release the specific details of the bilateral trade agreement (BTA) only after Washington offers India preferential conditions relative to its competitors. This prerequisite—using competitors as a benchmark to demand differentiated preferential treatment—in itself confirms that the negotiations are embedded in a differentiated bargaining framework led by the US side and pivoting on "administrative tariffs."

"We are in the final stage. There are still sticking points in certain areas, but we expect to find solutions within the next two to three months," Agarwal said. He also mentioned that the India-New Zealand free trade agreement was signed on April 27 and is expected to take effect in October.

The specific signing date of the agreement has yet to be set, with the Indian side answering only with "at an appropriate time"; the specific content of the sticking points on both sides remains undisclosed; whether the US side will truly grant India differentiated preferential conditions relative to other trading partners remains the prerequisite for Goyal's release of the agreement details. Under the framework of administrative tariffs and Section 301 investigations layered on top of each other, the journey from "basically finalized" to actual landing still depends on the US side's unilateral discretion.