The United States and India moved a step closer to a full trade agreement on Friday, unveiling an interim framework aimed at lowering tariffs, reshaping energy cooperation, and strengthening overall economic ties as both nations work to realign global supply chains.
In a joint statement, the two governments said the framework confirms their commitment to continued negotiations toward a broader bilateral trade pact, while acknowledging that further discussions are still needed before a final deal can be completed.
Separately, U.S. President Donald Trump signed an executive order removing an additional 25% tariff that had been imposed on Indian goods over New Delhi’s purchases of Russian oil. The order cited India’s commitment to stop importing Russian oil “directly or indirectly.”
The order added that U.S. officials would monitor compliance and could recommend reinstating the tariff if India resumes oil procurement from Russia, as Washington continues to pressure New Delhi to limit energy ties with Moscow.
However, the India-U.S. joint statement did not mention Russian oil purchases or any formal pledge from India on the issue.
Earlier this week, Trump announced that U.S. tariffs on Indian goods would be cut to 18% from 50% in exchange for India halting Russian oil purchases and lowering trade barriers. Half of the previous 50% rate had been imposed as punishment for India’s Russian oil imports, which Trump said were supporting Moscow’s war in Ukraine.
On Friday, Trump rescinded that 25% portion after India agreed to shift its oil purchases toward the United States and Venezuela.
Despite progress, the statement suggested India resisted U.S. pressure to broadly open its agricultural market. Trade Minister Piyush Goyal said in a post on X that the agreement protects farmers and rural livelihoods by “completely safeguarding sensitive agricultural and dairy products.”
India’s opposition Congress party criticized the deal, saying it was reached largely on U.S. terms and harmed farmers and traders, calling it a compromise of national interests.
Friday’s joint statement provided more specifics than the initial outline announced by Trump on Monday.
It confirmed that India will buy $500 billion worth of U.S. goods over five years, including oil, gas, coking coal, aircraft and aircraft parts, precious metals, and technology products. The technology category includes graphics processing units used in AI applications, along with other products used in data centers.
The statement also said India would eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including animal feed grains, tree nuts, fresh and processed fruit, soybean oil, wine, and spirits.
Under the framework, the United States will apply an 18% tariff on most imports from India, including textiles and apparel, leather and footwear, plastics and rubber products, organic chemicals, home décor, artisanal goods, and certain machinery.
India will receive the same tariff relief granted to other U.S. allied trade partners on specific aircraft and aircraft parts. It will also receive an auto-parts import quota that will qualify for a lower tariff rate.
The statement added that depending on the outcome of the Trump administration’s tariff investigation into pharmaceuticals and their ingredients, India would receive “negotiated outcomes” regarding generic medicines and related inputs.
Goyal welcomed the framework, saying it effectively opens a market worth $30 trillion — the size of the U.S. annual GDP — to Indian exporters, particularly farmers, fishermen, and micro, small and medium enterprises.
He said on Thursday that Washington and New Delhi aimed to sign a formal trade agreement in March, after which India’s tariff cuts on U.S. exports would take effect.
India also agreed to address longstanding non-tariff barriers affecting imports of agricultural goods, medical devices, and communications equipment. The two sides said negotiations would be completed within six months on an agreement to accept U.S. or international safety and licensing standards for imported products.
The United States said it would consider India’s requests for lower tariffs during further negotiations. Both countries also agreed to cooperate on export controls for sensitive technologies and to take steps to counter “non-market policies of third parties,” a reference to China.
The United States and India have attempted for years to finalize a comprehensive trade deal, with disputes ranging from agriculture and digital trade to medical devices and market access. But growing strategic concerns — including competition with China, supply-chain diversification, and energy security — have added urgency to the talks, officials in both countries said.