India is seeking a competitive advantage over rival nations before rolling out a much-delayed trade agreement with the US, after both countries agreed on the initial framework.

The country is unlikely to implement the agreement until it secures a competitive edge on tariffs, news agency ANI reported citing comments from Piyush Goyal, Union commerce and industry minister.

The comments underscore the depth of unresolved issues between the two trading partners, even as Prime Minister Narendra Modi and President Donald Trump expressed optimism about overcoming the hurdles last week.

“The issue currently pending is that our duties need to be lower compared to those of competing nations,” Goyal said at a press briefing. “Once this is settled, the trade agreement will be implemented.”

He added that the framework for the pact was finalised before the US Supreme Court ruled in February that Trump’s previous tariff policy, the ‘reciprocal tariffs’ were bad in law.

Goyal’s comment came days before US Trade Representative Jamison Greer is scheduled to visit New Delhi for a two-day visit to iron out differences. The commerce minister had previously said the long pending bilateral trade agreement may be signed in the middle of July.

Earlier this month, PM Modi met President Trump for their first in-person talks in more than a year. Both leaders struck an upbeat tone as they sought to turn the page on recent strains stemming from trade and other disputes.

The two leaders highlighted their personal rapport and touted progress in negotiations during their meeting on the sidelines of the Group of Seven summit in France. Trump said the US and India were “very close” to finalising a trade agreement.

While US and Indian officials have repeatedly signalled that a deal was within reach, negotiations have dragged on amid disputes over tariffs, market access and protections for politically sensitive sectors.

EU pact by December

India and the 27-nation European Union will sign the free trade agreement by December and are likely to implement the pact during February- March next year, Goyal said on Sunday.

On January 27 this year, India and the EU announced the conclusion of negotiations for the ‘mother of all deals’.

“Now, with almost zero duty, almost the entire European market will be open for us. The EU’s FTA (free trade agreement) will be signed by December and will be effective by February-March,” Goyal said during an interaction with chartered accountants in Mumbai.

“The whole world is looking towards India,” he added.

Under the India-EU FTA, about 93 per cent of Indian shipments will enjoy duty-free access to the 27-nation bloc, while imports of luxury cars and wines from the EU will become less expensive.

Taken together, India and the EU account for 25 per cent of the global GDP and one-third (about $11 trillion) of international trade (about $33 trillion).

Later, he told reporters that during the G7 Summit in France, the Canadian Prime Minister expressed a desire to conclude the proposed free trade agreement with India this year.

The two sides held the second round of negotiations for the Comprehensive Economic Partnership Agreement (CEPA) in May.