US, India release framework for interim trade deal | India News
The United States and India announced a framework for an Interim Agreement on mutual and mutually beneficial trade, marking an important step towards advancing the broader US-India Bilateral Trade Agreement (BTA) negotiations initiated by President Donald Trump and Prime Minister Narendra Modi in February 2025, a joint statement issued by the White House and the Department of Commerce said.
The statement stated that the Interim Agreement between the United States and India will represent a historic milestone in the partnership of our countries and demonstrate our shared commitment to mutual and balanced trade based on mutual interests and tangible results.
As part of 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.
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According to the Joint Statement, under the relevant executive order, the US will impose a reciprocal duty of 18 percent on goods of Indian origin, 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 envisages the removal of US tariffs on certain Indian aircraft and aircraft parts under national security-related declarations on aluminium, steel and copper. India will receive a preferential tariff rate quota for automotive parts in line with US national security requirements. The statement stated that, depending on the outcome of the US Section 232 investigation, India is also planning to receive negotiation results for generic drugs and pharmaceutical ingredients.
He added that both countries are committed to continuously providing preferential market access to each other in sectors of mutual interest and establishing rules of origin to ensure that the benefits of the agreement reach the United States and India first.
The statement stated that the two sides will discuss non-tariff barriers affecting bilateral trade. India has agreed to take steps to eliminate long-standing barriers 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 designated sectors within six months of the agreement’s entry into force, it said.
The United States and India also agreed to enhance cooperation on standards and conformity assessment procedures to increase ease of compliance and allow for changes to commitments in the event of changes to agreed tariffs by both parties.
Beyond the Interim Agreement, both countries said they would work to further expand market access through BTA negotiations. The US said it would consider India’s request to continue efforts to lower tariffs on Indian goods during the talks.
The framework also outlines strengthened economic security alignment, including cooperation on supply chain resilience, investment reviews, export controls and addressing non-market policies of third parties.
India has announced its intention to purchase US$500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years as part of the broader economic initiative. The two sides also agreed to significantly increase trade in technology products, including graphics processing units used in data centers, and expand joint technology cooperation.
The United States and India have also committed to removing barriers to digital trade and creating a path for robust, mutually beneficial digital trade rules under the BTA.
Both sides said they will immediately implement the framework and work to finalize the Interim Agreement, with the aim of signing a comprehensive and mutually beneficial Bilateral Trade Agreement in accordance with the agreed roadmap.
