US, India unveil framework for interim trade agreement; Check what’s in the deal | India News

The United States and India have announced an Interim Agreement framework focused on reciprocal and mutually advantageous trade, marking a significant step toward advancing broader U.S.-India Bilateral Trade Agreement (BTA) negotiations initiated by President Donald Trump and Prime Minister Narendra Modi in February 2025, according to a joint statement from the White House and India’s Department of Commerce.

Under the framework, India will eliminate or reduce tariffs on all US industrial products and a wide range of US food and agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits, among others.

The statement emphasized that the Interim Agreement between the United States and India represents a historic milestone in the bilateral partnership and reflects a shared commitment to balanced, reciprocal trade based on mutual interests and tangible results.

Elimination and reduction of tariffs

According to the joint statement, the US will impose reciprocal duties of 18% on goods originating from India under the current executive order covering sectors such as textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home decoration, craft products and certain machinery.

“Contingent upon successful conclusion of the Interim Agreement, the United States will eliminate reciprocal tariffs on a wide range of goods, including generic drugs, gems and diamonds, and aircraft parts.”

The framework also allows for the removal of US tariffs on certain Indian aircraft and aircraft parts, which are imposed on aluminium, steel and copper under national security-related declarations. India will benefit from preferential tariff rate quota for automotive parts in line with US national security requirements.

The statement also stated that India is expected to negotiate terms for generic drugs and pharmaceutical ingredients, depending on the results of the US Section 232 investigation.

Provide each other with preferential market access

The statement added that both countries have pledged to continuously provide preferential market access to each other in mutually important sectors and establish rules of origin to ensure that the benefits of the agreement are primarily in favor of the US and India. The statement also stated that the two sides will also discuss non-tariff barriers affecting bilateral trade.

India agreed to take measures to resolve long-standing hurdles in areas such as US medical devices, information and communications technology products, food and agricultural products, and to review the adoption of US-developed or international standards in certain sectors within six months of implementation of the agreement.

India plans to buy US products worth $500 billion

The two countries also agreed to strengthen cooperation on standards and conformity assessment procedures to simplify compliance and allow adjustments to commitments if both parties change agreed tariffs. Beyond the Interim Agreement, both countries have stated that they will continue to further expand market access through BTA negotiations, while the US has indicated that it will consider India’s request to continue efforts to reduce tariffs on Indian goods during the talks.

India has signaled plans to source $500 billion worth of energy products, aircraft and aircraft parts, precious metals, technology products and coking coal from the US over the next five years. The two countries also agreed to significantly increase trade in technology products, including graphics processing units for data centers, and deepen joint technology cooperation.

The framework emphasizes enhanced economic security alignment, including cooperation on supply chain resilience, investment reviews, export controls and responses to non-market practices of third parties.

Washington and New Delhi also pledged to remove barriers to digital trade and create a roadmap for robust, mutually beneficial digital trade rules under the BTA. The two sides will soon implement the framework and work towards the conclusion of the Interim Agreement aimed at signing a comprehensive and mutually beneficial Bilateral Trade Agreement.