India Eyes Swift U.S. Trade Deal with Rare Forward MFN Clause

India is accelerating trade talks with the U.S., offering significant concessions to secure a fast-track deal ahead of President Donald Trump’s proposed 26% reciprocal tariff deadline in July. According to Indian government sources, New Delhi is prepared to include a rare “forward most-favoured-nation” (MFN) clause—automatically granting the U.S. any future better trade terms India offers to other nations. This clause aims to “future-proof” the deal and ensure long-term competitiveness for American exporters.

The clause has seldom appeared in Indian trade agreements, with one limited instance in the 2022 India-Australia pact on wines. India previously resisted similar demands from the EU. The push now reflects New Delhi’s urgency to avoid U.S. tariffs and fill export gaps left by China.

In negotiations, India has proposed slashing tariffs on U.S. agricultural imports—such as frozen meat, poultry, fish, fruits, and juices—from 30–100% down to 0–5%. It is also open to granting tariff concessions on up to 90% of its 12,000 tariff lines immediately, with remaining cuts phased in.

In return, India is seeking lower U.S. duties on labor-intensive exports like textiles, leather goods, toys, furniture, and gems. It also wants long-term tariff relief on pharmaceuticals and industrial equipment to boost its role in U.S. supply chains.

Talks have progressed rapidly, with 19 out of 24 product categories already under discussion. A second phase may tackle sensitive items like soybeans, corn, and military equipment. If successful, the deal could position India as one of the first nations to ink a trade pact under Trump’s new tariff regime.

India’s trade ministry has not officially commented. The deal could be signed as soon as this week, according to U.S. Treasury Secretary Scott Bessent.