New Delhi, Feb 7 (.) The United States and India on Saturday announced that they have reached a framework for an Interim Trade Agreement, marking a significant step toward strengthening economic ties and advancing negotiations for a comprehensive Bilateral Trade Agreement (BTA), according to a joint statement released by the Ministry of Commerce and Industry.
The framework reaffirms commitments made during the launch of BTA negotiations by US President Donald Trump and Prime Minister Narendra Modi on February 13, 2025.
As part of the agreement, India will eliminate or reduce tariffs on all US industrial goods and a wide range of food and agricultural products.
These include dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine, spirits, and several other items.
The United States, meanwhile, will apply a reciprocal tariff rate of 18 percent on Indian-origin goods under an existing executive order.
These goods include textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home décor, artisanal items, and certain categories of machinery.
The US has also committed to removing reciprocal tariffs on a range of Indian exports, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
In addition, Washington will remove tariffs imposed on certain Indian aircraft and aircraft parts under national security-related proclamations covering aluminum, steel, and copper imports.
India, in turn, will receive preferential tariff-rate quotas for automotive parts exported to the US, subject to American national security requirements.
Negotiated outcomes for Indian generic pharmaceuticals and pharmaceutical ingredients will depend on the findings of an ongoing US Section 232 investigation.
Both sides agreed to provide preferential market access to each other in sectors of mutual interest on a sustained basis and to establish clear rules of origin to ensure that the benefits of the agreement accrue primarily to the two countries.
The framework also addresses long-standing non-tariff barriers affecting bilateral trade. India is committed to resolving issues related to US medical devices, easing restrictive import licensing procedures for information and communication technology goods, and reviewing the acceptance of US-developed or international standards for certain sectors within six months of the agreement’s entry into force. India also agreed to address barriers affecting US food and agricultural exports.
To improve regulatory cooperation, the two countries plan to hold discussions on standards and conformity assessment procedures in mutually agreed sectors. They also agreed that any future changes to tariffs by either country would allow the other to modify its commitments accordingly.
The statement further noted that both sides will continue negotiations to expand market access under the broader BTA. The United States said it would take into consideration India’s request for further reductions in tariffs on Indian goods during the talks.
The framework places strong emphasis on economic security cooperation, including steps to counter non-market policies of third countries, strengthen supply chain resilience, and enhance coordination on investment reviews and export controls. India also announced plans 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.
Trade in advanced technology products, including graphics processing units and data centre-related equipment, is expected to increase, alongside expanded joint technology cooperation. The two countries also committed to addressing barriers to digital trade and setting a clear pathway for robust and mutually beneficial digital trade rules as part of the BTA.
Both governments will move quickly to implement the framework and work toward finalising the Interim Agreement, with the ultimate objective of concluding a comprehensive Bilateral Trade Agreement in line with the agreed roadmap.
. VK VAN .