The United States and India moved closer to a broader trade pact on Friday by releasing an interim framework designed to lower tariffs, reshape energy cooperation, and deepen economic ties as both countries work to strengthen supply chains.
Below are the main takeaways from the joint statement:
The United States and India agreed on a framework for an interim reciprocal trade agreement.
The framework is tied to the wider U.S.-India Bilateral Trade Agreement (BTA) negotiations launched on Feb. 13, 2025.
The deal is intended to promote reciprocal, balanced trade and improve supply-chain resilience.
India will eliminate or reduce tariffs on all U.S. industrial goods.
India will also lower duties on a broad list of U.S. agricultural and food products, including dried distillers’ grains (DDGs) and red sorghum for animal feed, tree nuts and fruits, soybean oil, and alcoholic beverages such as wine and spirits.
India will provide preferential market access in agreed sectors.
The United States will apply an 18% reciprocal tariff rate on Indian-origin goods under existing executive orders.
The tariffs initially cover key sectors including textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor and artisanal products, and certain machinery.
After the interim deal is successfully concluded, the U.S. will remove reciprocal tariffs on a wide range of Indian goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
The U.S. will remove certain Section 232 tariffs affecting Indian aircraft and aircraft parts linked to steel, aluminium and copper measures.
India will receive a preferential tariff-rate quota for auto parts under U.S. national security tariff rules.
Any pharmaceutical tariff outcomes will depend on the ongoing U.S. Section 232 investigation.
India agreed to address long-standing barriers affecting U.S. medical devices, ICT goods import licensing, and U.S. food and agricultural imports.
India will review acceptance of U.S. or international standards and testing requirements in identified sectors within six months.
Both sides will continue discussions on standards and conformity assessment procedures.
The two countries will establish rules of origin to ensure the benefits mainly go to U.S. and Indian producers.
Either side may modify commitments if the other changes agreed tariff conditions.
Both governments pledged to address discriminatory or overly burdensome digital trade practices.
They will work toward formal digital trade rules under the full BTA.
The two sides agreed to align more closely on economic security and supply-chain resilience.
Cooperation is planned on investment screening, export controls, and responses to “non-market” policies by third countries.
India intends to purchase $500 billion in U.S. goods over five years, including energy products, aircraft and parts, precious metals, technology products, and coking coal.
Both sides also plan to expand technology trade, including GPUs and data-centre equipment.
The framework is expected to be implemented quickly.
Both countries will work to finalise the interim agreement while continuing negotiations toward a full bilateral trade deal.