WASHINGTON—One definition of insanity, the famous saying goes, is to do the same thing over and over yet expect different results. This expression is apt when applied to international trade negotiations, particularly when negotiators repeatedly seek an agreement while neither side budges on critical issues. The European Union and India, for example, spent years, across multiple changes in leadership, negotiating a free trade agreement (FTA) that appeared to be going nowhere. This process raised the question: Why continue to pursue the ambition if nothing fundamental has changed?
And yet, this example also proves that persistence pays off. Beginning in early 2025, European and Indian officials took a long, hard look at their respective positions. Spurred by top-level political commitments, they found creative ways to bridge gaps and compromise, ultimately concluding the FTA in January of this year.
The United States and India seem stuck in the first part of this process. Years of negotiations have continually hit a brick wall and failed to deliver a deal. And at present, discussions have effectively paused as the Trump administration’s tariff regime is reset following the US Supreme Court’s February decision striking down tariffs under the International Economic Emergency Powers Act (IEEPA).
Yet persistence can pay off here, too. Both sides should use the current pause to consider why past efforts failed as they work to finalize an interim agreement.
Stuck in the “insanity” cycle
During the first Trump administration, India and the United States seemed close to concluding a first-ever, game-changing trade agreement. At the time, the precipitating factor was the threat by the US negotiating team (which I led in 2017 and 2018) to suspend India’s preferential tariff benefits under the US Generalized System of Preferences (GSP) program. To move the process forward, the two negotiating teams focused their efforts on a limited number of priority market access issues, including medical devices, information technology products, and specific agricultural commodities. By early 2020, they seemed on the verge of concluding a bilateral trade agreement ahead of a state visit by US President Donald Trump to India.
However, this highly anticipated outcome, one that might have served as a platform for follow-on negotiations to explore additional market openings, remained out of reach. As former US Trade Representative Ambassador Robert Lighthizer later wrote in his book, No Trade Is Free: “We made headway but could never quite close the deal. I always felt that [Indian Minister of Commerce and Industry Piyush] Goyal wanted one but had to contend with the bureaucracy and the farmers as well as with me.” In retrospect, this was a true moment of reckoning and lost opportunity: a classic example of the trade agreement that got away for lack of final compromises and concessions.
Fast-forward to the second Trump administration: Indian Prime Minister Narendra Modi visited Washington only a month after Trump’s inauguration, and the two leaders agreed to pursue a comprehensive bilateral trade agreement. Negotiations commenced almost immediately, several months before “Liberation Day,” when Trump announced sweeping tariff increases on April 2, 2025, under the IEEPA. The talks appeared to make rapid progress, and there were hints from both sides that they were very close to a deal. Trump even suggested that it might be among the first concluded in his second term.
However, the situation suddenly turned south in July 2025, when Trump and White House aide Peter Navarro went on social media to criticize India’s purchases of Russian oil and its highly protectionist tariff and regulatory regime. Eventually, US tariffs against India hit 50 percent. The next few months were difficult for the bilateral relationship and the two negotiating teams as they tried simply to get things back to where they had been in June 2025.
The latest iteration of efforts to conclude a US-India trade agreement began on February 2 of this year, when Trump and Modi spoke by phone. During that call, they agreed that a new reciprocal tariff would be set at 18 percent, down from 25, and that the additional tariff associated with India’s purchases of Russian oil would be terminated. Within days, on February 6, the White House announced a “Framework Agreement” in a joint statement that outlined the contours of a legally binding “Interim Agreement.”
How persistence can pay off
To date, unforeseen developments have repeatedly prevented the United States and India from crossing the finish line on a trade agreement. In this latest example, on February 20, the Supreme Court struck down the IEEPA tariffs. The impact was immediate and significant: The ruling removed the tariffs the administration had used as leverage to conclude trade agreements with multiple countries, including the Framework Agreement with India.
In response, the Trump administration effectively turned on a dime by launching plan B in the form of new investigations under Section 301 of the Trade Act of 1974, one on forced labor and a second on excess capacity. While many critics argue that these investigations are likely to be a back door to resurrecting the IEEPA tariffs, Section 301 is a tried-and-true tariff statute that has a long history of use and is generally viewed as providing the administration with significant discretion to increase tariffs against select target trading partners.
The catch is that the US trade representative must conduct thorough investigations that meet very clear procedural requirements and build a record showing that the targeted trade practices are unjustifiable, unreasonable, or discriminatory and burden or restrict US commerce. In many respects, this must involve a strategic war plan, or at least be part of a reasoned trade policy, in contrast to the bazooka-like approach that the administration initially took under IEEPA. And a typical Section 301 investigation can take a year or more to run its course.
While US and Indian negotiating teams have continued working to finalize the interim agreement, some momentum appears to have been lost as they await the results of pending investigations and the possibility of additional Section 301 cases to come. For its part, India has been clear that it is ready to conclude the interim agreement, so long as it can be assured that the tariffs that result are preferential to those imposed on other major competitor nations.
For the moment, this condition may be difficult to meet given that several countries in India’s backyard—such as Pakistan, Sri Lanka, Nepal, and the Philippines—are not subject to the Section 301 investigation into excess capacity. On tariffs tied to forced labor, the results are already in, with India in a relatively good place at 10 percent. But India’s relative position could change once excess-capacity results are announced, unless additional Section 301 investigations bring some of these competing countries under similar tariffs.
It would be easy to look at the past few years and conclude that the US-India trade negotiations are stuck in a loop of failure. An agreement remains elusive. To break this cycle, US and Indian negotiators will need to learn and apply the lessons of past failures.
First, Modi and Trump, along with their top trade officials, should reaffirm their commitment to concluding an agreement. The leaders’ engagement must be sustained and may require direct follow-up to push for breakthroughs. Second, each side should approach the negotiation with some room to maneuver and make compromises. If one side is not willing to give anything on the other side’s topline needs, then negotiations will likely remain stuck. Third, an agreement should provide a high level of mutual confidence that its terms will be implemented. Current uncertainty over what tariff level India can expect in the interim agreement, and whether it will be preferential relative to tariffs on other countries, may be one reason for the delays.