US–India Announce Interim Trade Deal; Cut Tariffs To 18%

The United States and India announced a framework for an Interim Agreement on reciprocal trade, reducing tariffs on Indian imports from 25 per cent to 18 per cent.

Officials said the agreement aims to deliver early results while supporting resilient supply chains.

The framework reaffirms both countries’ commitment to negotiations on a full US–India Bilateral Trade Agreement, launched by President Donald Trump and Prime Minister Narendra Modi on February 13, 2025.

Officials described the Interim Agreement as a historic milestone, reflecting mutual dedication to balanced trade and tangible outcomes.

Under the deal, India will reduce or eliminate tariffs on US industrial and agricultural goods, including tree nuts, soybean oil, wine, and other products.

The United States will apply an 18 per cent tariff on Indian goods such as textiles, apparel, leather, plastics, and machinery.

Further tariff relief could follow for pharmaceuticals, gems, diamonds, and aircraft parts upon successful implementation.

The framework also addresses non-tariff barriers. India will simplify import licensing for US medical devices and ICT goods and determine whether US or international standards are acceptable for exports in key sectors.

Both sides will cooperate on standards, digital trade, supply chain resilience, and economic security.

India plans to purchase $500 billion of US energy, aircraft, technology, and other products over the next five years.

The framework establishes preferential market access and rules of origin to ensure benefits primarily accrue to both countries.

Officials confirmed prompt implementation as both nations work toward finalising the Interim Agreement.

The move paves the way for a comprehensive Bilateral Trade Agreement, strengthening economic and strategic ties between Washington and New Delhi while providing concrete benefits to exporters and consumers in both countries.

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