India’s US trade deal at risk without fast-track authority: GTRI

Unlike past trade agreements, any pact India finalizes could face prolonged scrutiny and potential amendments by US lawmakers, as the country currently lacks Fast Track Trade Authority (FTTA)—a mechanism that allows the US president to negotiate trade deals and present them for a simple up-or-down vote in Congress. Without it, any agreement is vulnerable to political wrangling, delays, or even rejection.

The concerns were outlined in a Global Trade Research Initiative (GTRI) report released Tuesday, just as a US delegation led by assistant trade representative Brendan Lynch arrived in New Delhi for talks. The delegation, in India until 29 March, is set to meet India’s chief trade negotiator Rajesh Aggarwal and key government ministers.

“Partner countries are required to alter domestic laws, regulations, and administrative procedures in line with US interpretations of the agreement, often after signing," said Ajay Srivastava, a former Indian Trade Service officer. This effectively enables Washington to renegotiate key provisions at will, leaving trade partners vulnerable to shifting demands."

For India, this creates an uncertain playing field, as there is no guarantee that the final agreement will be honoured in its original form, the GTRI report noted.

A spokesperson for India’s commerce ministry did not respond to a request for comment.

The US Embassy acknowledged ongoing negotiations. “I can’t speculate on the trade deal, but last month, President Trump announced negotiations to address long-running disparities in the US-India trading relationship, with the goal of signing an agreement," said Christopher Elms, a US Embassy spokesperson.

Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO), suggested that despite concerns over FTTA, a deal remains on track. “When the US president has committed to our prime minister to have a BTA by fall 2025, he must have seen the mechanism that enables him to complete it by that deadline," Sahai said.

He added that even if FTTA plays a role in early discussions, the US could still move forward by sending a team to outline the framework before formal negotiations begin.

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US president Donald Trump is expected to announce the reciprocal tariff plan on 2 April for all countries, including India, as part of efforts to address the US trade imbalance. The US currently runs a trade deficit with India and several other nations.

Why India is moving ahead

India stands out as the only country currently considering a full-fledged FTA with the US under the Trump administration. In contrast, several nations have taken a more cautious approach, wary of Washington’s shifting trade policies and the absence of FTTA.

Still, an India-US free trade agreement could deepen economic ties, boosting exports, technology transfers, and investments. Key beneficiaries include textiles, pharmaceuticals, IT, and agriculture, while sensitive sectors like dairy and manufacturing may face risks. Market access, tariff reductions, and regulatory alignments would shape its impact on both economies.

A weakened US trade framework

The FTTA, also known as Trade Promotion Authority (TPA), has historically been crucial in securing swift approval of trade deals, including NAFTA and several bilateral FTAs. However, since 2021, this authority has lapsed, and efforts to renew it have stalled. Without it, any agreement must go through the standard legislative process, where lawmakers can introduce changes, demand new terms, or block it entirely.

Beyond legislative hurdles, Washington’s post-FTA certification process poses an additional challenge. This mechanism allows the US to unilaterally determine whether a trade partner has fulfilled its obligations before an agreement takes effect.

Past FTA hurdles

In past FTAs, the US has used this process to demand additional legal or policy changes after deals were signed, the GTRI report noted.

Several countries have struggled with the US certification framework, which allows Washington to unilaterally determine whether a trade partner has met its obligations before an agreement takes effect.

The US-Panama FTA took more than five years to be implemented due to prolonged certification delays. Peru had to draft 35 new laws, while the Dominican Republic was required to modify fuel transport regulations to accommodate American companies, according to the GTRI report.

In some cases, the process has triggered domestic backlash. In Peru and Guatemala, certification demands led to protests and legal battles over sovereignty concerns, with critics accusing the US of "moving the goalposts" by imposing additional requirements beyond the original deal.

Beyond legislative and procedural hurdles, corporate lobbying plays a significant role in shaping US trade policy. Industries such as pharmaceuticals, agriculture, and energy often influence certification requirements, pushing for stricter intellectual property laws, food safety standards, and regulatory changes that favor American businesses.

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Large pharmaceutical firms have reportedly lobbied for specific policy changes before certifying trade agreements in past cases, effectively using the process to secure commercial advantages.

Trade ambitions vs barriers

India and the US aim to expand bilateral trade from $200 billion to $500 billion by 2030. India is seeking mutual tariff reductions as part of the deal, and both nations have agreed in principle to lower certain tariffs to facilitate trade growth, according to officials.

Washington’s key concerns include high tariffs on agricultural products, an uneven playing field in the e-commerce sector, and non-tariff barriers restricting access for US goods and services.

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In response, India has already reduced some duties, benefiting sectors important to the US. Tariffs on motorcycles—long a sticking point—were lowered from 50% to 30%, aiding premium bikemaker Harley-Davidson. Duties on bourbon whiskey dropped from 150% to 100%, while tariffs on ethernet switches were cut from 20% to 10%.

India’s exports to the US have remained robust despite some fluctuations. Shipments stood at $75.6 billion in FY22, rising to $78.3 billion in FY23 before slipping slightly to $77.5 billion in FY24. From April to February of FY25, exports totalled $76.38 billion, up from $70.01 billion during the same period in FY24, commerce ministry data show.