Washington: The US and India on Saturday announced that they have reached a framework for an interim trade agreement, under which America will reduce tariffs on India to 18 per cent, according to a joint statement issued by the White House.
It said the framework reaffirms the countries’ commitment to the broader US-India Bilateral Trade Agreement negotiations launched by President Donald J Trump and Prime Minister Narendra Modi on February 13, 2025.
The framework will include additional market access commitments and support more resilient supply chains.
The interim agreement follows an announcement earlier this week by US President Donald Trump that Washington and New Delhi and reached a deal to sharply cut US tariffs on Indian goods to 18% from 50%, in exchange for India halting purchases of Russian oil and lowering trade barriers.
Indian Commerce Minister Piyush Goyal said on Thursday that the two sides were aiming to sign a formal trade deal in March, after which India would reduce tariffs on a range of US goods.
Reacting to X, Piyush Goyal said the interim trade framework would “significantly expand market access for Indian exporters, especially MSMEs, farmers and fishermen,” adding that access to the roughly $30 trillion US market and tariff cuts to 18% would create new opportunities across sectors, including textiles, leather, chemicals, and machinery.
He said tariffs would be reduced to zero on products such as generic pharmaceuticals, gems and diamonds, and aircraft parts, while India had secured exemptions under Section 232 and tariff-rate quotas for auto parts. “At the same time, sensitive agricultural and dairy products have been fully protected to safeguard farmers’ interests and rural livelihoods,” Goyal said, adding that the framework reflects a shared US-India commitment to deepening economic cooperation and sustainable growth.
Trump announced the understanding following a call with Indian Prime Minister Narendra Modi, saying India would begin buying oil from the United States and potentially Venezuela. On Friday, Trump also signed an executive order rescinding a punitive 25% duty imposed on all imports from India over its purchases of Russian oil. However, the executive order states that India’s purchases will be monitored by the United States and warns that if Washington finds India has resumed directly or indirectly importing Russian oil, the President will consider whether and to what extent to take additional action, including whether to reimpose the additional 25% tariff on imports from India.
Reacting to the announcement, US Trade Representative Ambassador Greer said the interim deal marked a significant step in expanding access for American goods and strengthening economic ties between the two countries.
“President Trump’s dealmaking is unlocking one of the largest economies in the world for American workers and producers, lowering tariffs for all U.S. industrial goods and a wide array of agricultural products,” Greer said. “Today’s announcement demonstrates the deepening ties between the United States and India as we create new opportunities for farmers and entrepreneurs in both countries. I thank Indian Minister of Commerce and Industry Piyush Goyal for his leadership and commitment to achieve fair and balanced trade with the United States.”
In a detailed statement issued by the White House, the two countries said the interim framework “reaffirms the countries’ commitment to the broader US-India Bilateral Trade Agreement negotiations” launched by Trump and Modi in February, and described the deal as a “historic milestone” in the partnership.
Under the framework, India will eliminate or reduce tariffs on all US industrial goods and a wide range of agricultural and food products, including tree nuts, fruits, soybean oil, wine and spirits. The United States, in turn, will apply a reciprocal tariff rate of 18% on Indian-origin goods such as textiles, apparel, leather, chemicals and certain machinery.
Washington also agreed to remove tariffs on certain Indian aircraft and aircraft parts imposed under national security provisions, while India will receive preferential tariff-rate quotas for automotive parts, subject to US security requirements. The two sides said they would also work toward negotiated outcomes on generic pharmaceuticals, depending on the results of US investigations.
“The Interim Agreement will represent a common commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes,” the statement said.
The framework also commits both countries to address non-tariff barriers, establish clear rules of origin, improve regulatory cooperation, and expand market access through continued negotiations on the broader bilateral trade agreement.
India, for its part, said it intends to purchase $500 billion worth of US energy products, aircraft, precious metals, technology products and coking coal over the next five years, while both sides agreed to significantly increase trade in technology goods, including components used in data centres.
The United States and India said they would “promptly implement this framework” as they work toward finalising the interim deal and advancing negotiations on the wider bilateral trade agreement.
