NEW DELHI – India is preparing to offer the United States a rare trade concession that would grant Washington any future benefits India gives to other trading partners, as part of efforts to swiftly finalize a bilateral agreement under President Donald Trump’s administration, Indian officials said.
The proposed “forward most-favoured-nation” (MFN) clause—seldom included in India’s past trade deals—would ensure the U.S. automatically receives equal or better tariff terms if India strikes more favourable arrangements with other countries, two sources familiar with the talks told Reuters. “It’s a way to future-proof the deal,” one official said.
India has already taken the lead among major U.S. trading partners—surpassing the pace of negotiations seen with China, the European Union, and Canada—by extending early offers and tariff concessions to Washington. New Delhi hopes the move will avert or reduce the impact of a proposed 26% reciprocal tariff threatened by Trump.
U.S. Treasury Secretary Scott Bessent indicated earlier this week that a deal could be signed with India in the coming days, though he provided no specifics. The Trump administration has stated that a roadmap is already in place.
India is reportedly willing to offer the U.S. more favorable trade terms than it might extend to the EU or UK. However, Indian negotiators want assurances that India can become a key supplier in sectors where U.S. companies are reducing reliance on China.
While a similar MFN clause was raised by the EU during India-EU trade talks, India has not agreed to that request so far. The only known precedent is a narrow version offered in the India-Australia deal for select wine categories in 2022, according to trade expert Ajay Srivastava of the Global Trade Research Initiative.
India’s concessions to the U.S. could include politically sensitive sectors, such as agriculture. A senior official confirmed that progress was made during recent discussions in Washington, with 19 out of 24 trade categories identified for expedited talks.
Proposed tariff cuts would reduce duties on U.S. agricultural exports—including frozen meats, poultry, fish, and various fruits and juices—from current rates of 30–100% to as low as 0–5%. India is reportedly prepared to lower tariffs on up to 90% of its 12,000 tariff lines immediately, with phased reductions on the rest.
In return, India is seeking reduced U.S. tariffs on products from key job-generating industries such as textiles, toys, leather, gems, furniture, and automotive parts. New Delhi also wants long-term preferential access for pharmaceuticals and engineering products, aiming to embed Indian manufacturers more deeply into U.S. supply chains.