India is prepared to present the United States with a distinctive trade provision that guarantees Washington will always receive the most advantageous terms that India offers to any of its other trading partners, as indicated by Indian government officials who are knowledgeable about the situation. This provision, referred to as a ‘forward most-favoured-nation’ (MFN) clause, would automatically apply to the U.S. any improved tariff agreements that India may establish with future partners. Indian officials have informed Reuters that such a clause has seldom been included in previous trade agreements. The MFN clause has also been mentioned by the European Union during its ongoing free trade negotiations with India, although New Delhi has not yet made a commitment. Incorporating this provision into a U.S. agreement would represent a notable change in India’s trade policy. This proposal is part of New Delhi’s broader initiative to swiftly conclude a trade agreement with the United States. India has extended several offers and initial concessions to the U.S., demonstrating a greater eagerness for a deal compared to other significant trading partners like China, Canada, or the European Union. One official noted that India is willing to provide Washington with more favorable terms than those being contemplated for Britain or the EU, but would expect reciprocal assurances—especially that Indian exports could occupy market voids left by Chinese products. Throughout multiple rounds of discussions with U.S. officials, India has expressed a readiness to open sensitive sectors, including agriculture, as reported by Reuters. New Delhi has suggested reducing tariffs to between 0% and 5% on a variety of American frozen meat and agricultural products, such as fish, poultry, fruits, and juices, which currently face tariffs as high as 100%. In exchange, India is seeking lower U.S. tariffs on essential labor-intensive exports, including textiles, leather goods, toys, furniture, automotive components, and gems and jewelry.Indian negotiators have sought long-term guarantees for preferential access in sectors such as pharmaceuticals and industrial equipment, with the objective of establishing India as a dependable supplier within American supply chains.
