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5 Jun 2026International Relations3 questions

India, US May Execute First Phase Of Trade Pact By Next Month: Piyush Goyal

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Article summary

India and the United States are on the verge of executing the first phase of a bilateral trade agreement, with Commerce Minister Piyush Goyal indicating the deal could be finalised by mid-July 2026. The interim pact comes against the backdrop of the Trump administration's sweeping reciprocal tariff regime, under which India faced a 26% tariff that was paused for 90 days to allow negotiations. The first phase is expected to cover select goods, reduce tariff barriers on priority sectors, and lay the groundwork for a more comprehensive trade agreement. India's key export interests include textiles, gems and jewellery, pharmaceuticals, and engineering goods, while the US seeks greater market access for agricultural products, dairy, and digital services. For UPSC aspirants, this development is significant as it touches upon India's trade diplomacy, WTO obligations, and the strategic recalibration of India-US economic relations in a multipolar world.

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recallTests whether you read the article and retained key facts.
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applicationTests whether you can apply the concept to a new scenario.
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analysisTests whether you can reason across multiple related facts.
1Q

Sample questions — answers revealed after test

International RelationsRecallEasy

Q1. With reference to the India-US bilateral trade relationship, which of the following statements is most accurately supported by recent trade data and policy developments?

AThe US removed India's Generalised System of Preferences (GSP) benefits in 2019, and two-way India-US trade in goods and services exceeded $190 billion in 2023-24.
BThe US removed India's GSP benefits in 2021 as part of the Trump administration's broader tariff restructuring, with bilateral trade crossing $150 billion in 2023-24.
CIndia's GSP benefits were suspended by the WTO Dispute Settlement Body in 2019 following a formal complaint by the United States.
DThe reciprocal tariff of 26% imposed by the US on Indian goods has been permanently waived under a bilateral executive agreement signed in 2025.
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International RelationsApplicationMedium

Q2. India and the US are negotiating an 'early harvest' interim trade agreement ahead of a comprehensive FTA. A trade policy analyst argues that such an interim deal, if it grants preferential tariffs exclusively to the US, could expose India to legal challenge at the WTO. Which WTO principle is the analyst invoking, and under which condition does an exception to it legitimately exist?

AThe analyst invokes the Most Favoured Nation (MFN) principle; an exception exists when a preferential deal covers 'substantially all trade' between the parties and meets the conditions of GATT Article XXIV.
BThe analyst invokes the National Treatment principle; an exception exists when the trading partner is classified as a developing country under the WTO's Special and Differential Treatment framework.
CThe analyst invokes the MFN principle; an exception exists automatically for any bilateral deal between WTO members, provided the agreement is notified to the WTO Secretariat within 90 days of signing.
DThe analyst invokes the Tariff Binding principle; an exception exists when the importing country files a waiver request under GATT Article XVIII, which permits developing countries to protect infant industries.
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International RelationsAnalysisHard

Q3. Consider the following statements regarding the India-US interim trade agreement negotiations and the broader bilateral trade architecture: 1. A 90-day tariff moratorium granted by the US functions as a legally binding suspension of reciprocal tariffs under WTO dispute settlement procedures. 2. India's offensive interests in the trade negotiations include market access for pharmaceuticals, textiles, and IT services, while its defensive sensitivities include agriculture, dairy, and data localisation. 3. An 'early harvest' agreement that covers only a narrow basket of goods may not meet the 'substantially all trade' threshold required under GATT Article XXIV for a WTO-consistent preferential trade agreement. 4. The India-US Initiative on Critical and Emerging Technology (iCET) is a purely defence-focused bilateral framework with no direct linkage to trade or economic cooperation. Which of the statements given above are correct?

A1 and 4 only
B2 and 3 only
C1, 2 and 3 only
D2, 3 and 4 only
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