India is close to concluding the largest trade agreement in its history and simultaneously stuck on a much smaller one. The contrast says something useful about where New Delhi’s leverage now lies.

Three deals, three states of play

The European agreement is the significant one. Officials describe the text as a week or two from completion, and on 16 July both sides agreed to begin formal negotiations on India’s association with Horizon Europe, the bloc’s €95.5 billion research and innovation programme. Those talks are targeted for conclusion before year-end. Adding research participation to a trade agreement signals an intention to build something broader than tariff schedules, closer to the technology and standards partnerships the EU has pursued with Japan and South Korea.

Where Washington is stuck

The India–US first-phase pact has been described as sitting at the last one percent of its legal text, which is both an encouraging and a familiar position. The remaining disagreements are narrow but genuine. India wants any residual tariff pitched no higher than the rates applied to competitors such as Vietnam and Indonesia, on the reasonable argument that a worse rate would simply divert sourcing. Washington wants firmer commitments on labour standards in textiles, seafood and low-cost manufacturing.

Neither position is easy to concede. Labour standards in Indian textiles involve a fragmented supplier base that New Delhi does not directly control. Tariff parity, meanwhile, is precisely the lever the US administration has been unwilling to give up.

The strategic read

India’s negotiating position has improved because tariff pressure elsewhere has made it more valuable. As duties on Chinese goods rose and Southeast Asian transshipment came under scrutiny, India became one of the few large economies with scale, an English-speaking professional workforce and no obvious geopolitical disqualification. The EU appears to have concluded that locking in access early is worth conceding on agriculture and services.

For businesses, the practical consequences differ by market. A concluded EU agreement gives Indian exporters duty advantages into a market of 450 million consumers and gives European firms improved access to Indian procurement and services. It also creates a rules baseline — on data, standards and sustainability — that Indian suppliers will need to meet, and that will propagate through supply chains regardless of where the goods ultimately go.

An unresolved US arrangement means continued tariff uncertainty for exporters in exactly the sectors where India competes most directly with ASEAN. Companies deciding between Indian and Vietnamese capacity have been waiting on this for months, and the delay itself is pushing some decisions toward Vietnam by default.

Summary

India has an operational agreement with the UK, a European agreement in final drafting with research cooperation attached, and an American agreement that has not closed. The EU deal is the more consequential of the three, both commercially and because it imports a regulatory baseline into Indian supply chains. Firms weighing India against ASEAN alternatives should treat the EU timeline as the more reliable planning assumption and the US timeline as unresolved.