New Delhi/Washington: India and the United States have announced a joint framework for an Interim Trade Agreement, marking a major step toward a broader Bilateral Trade Agreement (BTA) and signalling deeper economic alignment between the two partners.
The framework, unveiled through a joint statement, reaffirms both sides’ commitment to ongoing negotiations launched by Prime Minister Narendra Modi and US President Donald Trump, aimed at expanding market access and strengthening supply-chain resilience.
Officials described the interim arrangement as a milestone toward balanced and reciprocal trade, setting the stage for concrete tariff adjustments, regulatory cooperation and expanded commerce across sectors.
India–US partnership powering prosperity 🇮🇳🤝🇺🇸
The India–US Interim Trade Agreement framework, guided by the leadership of PM Sh @narendramodi ji, represents a significant leap in turning international cooperation into meaningful gains for citizens and businesses across India.… pic.twitter.com/9jm6maPSFl
— Dr Jitendra Singh (@DrJitendraSingh) February 7, 2026
Tariff Moves and Market Access
Under the framework, India has agreed to eliminate or reduce tariffs on US industrial goods and a wide basket of agricultural and food products, including dried distillers’ grains, red sorghum, tree nuts, fruits, soybean oil, wine and spirits.
In return, Washington will apply a reduced reciprocal tariff of 18% on many Indian exports — down from much higher earlier duties — covering sectors such as textiles, leather, plastics, organic chemicals, home décor and machinery.
The US is also expected to remove tariffs on select products such as aircraft parts, gems and diamonds and generic pharmaceuticals once the agreement is fully implemented.
Additionally, certain national-security-linked tariffs on Indian aircraft components will be scrapped, and preferential access will be extended in identified sectors on both sides.
Addressing Barriers, Boosting Cooperation
Both countries have pledged to tackle non-tariff barriers affecting trade — including long-standing issues tied to US medical devices and agricultural products — and to establish rules of origin ensuring benefits primarily accrue to both economies.
They also committed to cooperation on digital trade norms, investment screening and export controls as part of the broader BTA roadmap.
$500 Billion Purchase Commitment
A major component of the framework is India’s intention to purchase about $500 billion worth of US goods over five years, spanning energy products, aircraft and parts, technology equipment, precious metals and coking coal.
Trade in high-technology items — including GPUs and data-centre equipment — is also expected to expand alongside joint tech collaboration.
Broader Impact and Reactions
The tariff reduction is seen as boosting competitiveness of Indian exporters in the American market and improving access to one of the world’s largest consumer bases.
Government leaders have argued that the pact protects sensitive sectors such as dairy and agriculture while opening opportunities for exporters and MSMEs, though critics have raised concerns about its overall balance.
Agriculture Minister Shivraj Singh Chouhan welcomed the interim deal, asserting that safeguards remain intact for domestic farmers in key production areas such as dairy, grains and vegetables.
Road Ahead
Both sides aim to implement the framework swiftly and finalise the interim accord as a stepping stone toward concluding a comprehensive Bilateral Trade Agreement in the coming months.
