Better To Sign When US Sets Global Tariff Architecture: India On Trade Deal

The United States is trying to create a tariff architecture globally, so, it's better to sign the trade deal once they set the framework, said India's Commerce Secretary Rajesh Agrawal on the India-US trade deal on Monday. The trade agreement, announced in the first week of February, was to be signed in March. However, the tariffs imposed by US President Donald Trump on other nations over "unfair trade" were recently struck by the US court as "unlawful".

Subsequently, the US President announced a 10 per cent uniform tariff on import from all nations under Article 122 of US Constitution. "Actual signing of the deal will be done when new architecture of tariffs will be created by the US. We'll wait for tariff clarity first," said Agrawal. He, however, added, "The deal is ready. It has not been called off and there is nothing like a stand-off between the two nations."

Agrawal made the remarks while presenting India's trade deficit data for February. As per government data, India's trade deficit narrowed in February even as the country's imports jumped significantly. While India's exports stood at $36.61 billion in February, dropping marginally by 0.81 per cent compared with a year ago, the country's imports jumped 24.11 per cent to $63.71 billion.

Even with higher imports, the trade deficit -- difference between imports and exports -- reduced to $27.1 billion in February.  For February, analysts had expected the trade gap to be around $28.8 billion. In January, the deficit was much higher at $34.68 billion.

The February numbers come at a time when major trade routes have been disrupted due to the ongoing conflict in Iran, which began on February 280. The conflict has disrupted shipping through the Strait of Hormuz, a narrow sea route that carries a large share of the world's oil and gas supplies. Freight costs have also risen, adding uncertainty to global trade. Therefore, economists say that India's trade deficit for the month of March could be much higher.

Notably, India depends heavily on energy imports. It buys more than 80 per cent of its crude oil and about 60 per cent of its cooking gas from overseas, with a large share coming from the Middle East. Since the beginning of the fresh conflict in Iran, India has increased its oil import from Russia, but not at the same discounted price as before.

According to a Financial Times report, India is now paying about $10-20 more per barrel for Russian oil. Commerce Secretary Agrawal also said that the increase is linked to disruptions in global energy supply caused by the ongoing conflict. Earlier this month, the US granted a 30-day waiver to India to buy "sanctioned" Russian oil.

The conflict has not just raised our import bill but also affected exports of goods such as rice to countries like Iran, Iraq, Qatar and Saudi Arabia. India's exports could slow in March due to logistical problems linked to the crisis in the Middle East, said Agrawal.

US Remains India's Largest Export Market

For the broader April-February period of the current financial year (2025-26), India's exports rose 1.84 per cent to $402.93 billion, according to the commerce ministry. Imports also increased during the period, climbing 8.53 per cent to $713.53 billion.

The United States remained India's largest export market during this period. Exports to the US rose from $76.36 billion in April-February FY25 to $79.29 billion in April-February FY26. After the US, the United Arab Emirates was the second-largest destination for Indian exports, followed by China.

Gold Imports Show Mixed Trend

The data also showed an interesting trend in gold imports. In terms of quantity, India imported 8 per cent less gold between April 2025 and January 2026. But in terms of value, the gold import bill rose 20.06 per cent during the same period. This happened because global gold prices have increased.

The surge in price has pushed up the overall value even as the total import volume fell. It is important to mention here that India is the world's second-largest consumer of gold and the largest market for silver. The country meets nearly all of its gold demand through imports and depends on overseas supplies for over 80 per cent of its silver requirements.