US, India release framework for interim trade deal

As part of the framework, India will eliminate or reduce tariffs on all US industrial goods 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 United States and India have announced a framework for an Interim Agreement on reciprocal and mutually beneficial trade, marking a significant step toward advancing the broader US-India Bilateral Trade Agreement (BTA) negotiations launched by President Donald Trump and Prime Minister Narendra Modi in February 2025, a joint statement released by the White House and Commerce Ministry stated.

The Interim Agreement between the United States and India will represent a historic milestone in our countries' partnership, demonstrating a common commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes, the statement mentioned.

As part of the framework, India will eliminate or reduce tariffs on all US industrial goods 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.

According to the Joint Statement, the United States will, in turn, apply a reciprocal tariff of 18 per cent on Indian-origin goods under the relevant executive order, covering sectors such as textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home decor, artisanal products, and certain machinery. "Subject to the successful conclusion of the Interim Agreement, the US will remove reciprocal tariffs on a wide range of goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts."

The framework also provides for the removal of US tariffs on certain Indian aircraft and aircraft parts imposed under national security-related proclamations on aluminium, steel and copper. India will receive a preferential tariff rate quota for automotive parts, consistent with US national security requirements. Depending on the outcome of a US Section 232 investigation, India is also set to receive negotiated outcomes for generic pharmaceuticals and pharmaceutical ingredients, the statement mentioned.

Both countries committed to providing each other with preferential market access in sectors of mutual interest on a sustained basis and to establishing rules of origin to ensure that the benefits of the agreement accrue primarily to the United States and India, it added.

The statement said the two sides would address non-tariff barriers affecting bilateral trade. India agreed to take steps to address long-standing barriers in areas such as US medical devices, information and communication technology goods, and food and agricultural products, and to review the acceptance of US-developed or international standards in identified sectors within six months of the agreement's entry into force, it stated.

The United States and India also agreed to enhance cooperation on standards and conformity assessment procedures to improve compliance ease and to allow modifications to commitments in the event of changes to agreed tariffs by either side.

Beyond the Interim Agreement, both countries said they would work toward further expanding market access through the 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 the addressing of third parties' non-market policies.

As part of the broader economic engagement, India expressed its intention to purchase USD 500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years. The two sides also agreed to significantly increase trade in technology products, including graphics processing units used in data centres, and to expand joint technology cooperation.

The United States and India further committed to addressing barriers to digital trade and to establishing a pathway for robust, mutually beneficial digital trade rules under the BTA.

Both sides said they would promptly implement the framework and work toward finalising the Interim Agreement, with a view to concluding a comprehensive and mutually beneficial Bilateral Trade Agreement in line with the agreed roadmap.