The US has agreed to remove the 18 per cent reciprocal tariff on a wide range of Indian goods only after the interim trade agreement is successfully concluded, according to the joint statement issued by India and the United States on Saturday.
Until the agreement is finalised, the US would continue to apply the reciprocal tariff on Indian exports such as textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home décor, artisanal products, and select machinery.
Subject to the completion of the interim deal, tariffs are proposed to be removed on products including generic pharmaceuticals, gems and diamonds, and aircraft parts.
The framework for the interim agreement was announced as part of ongoing negotiations toward a broader India-US Bilateral Trade Agreement (BTA), launched by US President Donald Trump and Prime Minister Narendra Modi in February 2025.
Under the proposed framework, India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fruits, soybean oil, wine, and spirits.
At the same time, India has fully protected sensitive agricultural and dairy products such as wheat, rice, maize, soya, poultry, milk, cheese, certain vegetables, and meat to safeguard farmers’ interests and rural livelihoods.
The joint statement also provides for exemptions under Section 232 for certain aircraft and aircraft parts, preferential tariff-rate quotas for automotive parts, and negotiated outcomes for generic pharmaceuticals, subject to regulatory and national security reviews.
Both sides agreed to address non-tariff barriers affecting bilateral trade, establish rules of origin to ensure benefits accrue primarily to the two countries, and work toward expanding market access through continued BTA negotiations.
Officials said the interim framework seeks to balance market access commitments with domestic sensitivities, even as talks continue on a comprehensive trade agreement.
United States and India agree on a framework for an interim reciprocal trade agreement
The United States and India moved closer to a trade pact on Friday, releasing an interim framework that would lower tariffs, reshape energy ties and deepen economic cooperation as both countries seek to realign global supply chains.
United States and India agree on a framework for an interim reciprocal trade agreement
Framework linked to broader US-India Bilateral Trade Agreement (BTA) talks launched on Feb 13, 2025
To eliminate or reduce tariffs on all U.S. industrial goods
To cut duties on a wide range of U.S. farm and food products, including DDGs (dried distillers’ grain) and red sorghum for feed, tree nuts and fruits, soybean oil, wine and spirits
To provide preferential market access in agreed sectors
To apply an 18% reciprocal tariff rate on Indian-origin goods under existing executive orders
Tariffs initially cover sectors including textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home decor and artisanal goods, certain machinery * To remove reciprocal tariffs on a wide range of Indian goods after successful conclusion of the interim deal, including generic pharmaceuticals, gems and diamonds, aircraft parts
U.S. to remove certain Section 232 tariffs on Indian aircraft and aircraft parts tied to steel, aluminium and copper measures * India to receive a preferential tariff-rate quota for auto parts under U.S. national security tariff rules * Pharmaceutical tariff outcomes subject to ongoing U.S. Section 232 probe
India to address long-standing barriers affecting U.S. medical devices, ICT (Information and Communication Technology) goods import licensing, U.S. food and agricultural products * India to review acceptance of U.S. or international standards and testing rules within six months in identified sectors * Both sides to discuss standards and conformity assessment procedures
Both sides to set rules of origin to ensure benefits accrue mainly to U.S. and Indian producers Either side can modify commitments if the other changes agreed tariffs
Both countries commit to address discriminatory or burdensome digital trade practices
To work toward digital trade rules under the full
Both sides to align on economic security and supply chain resilience
Cooperation planned on investment reviews, export controls, non-market policies of third countries
India intends to purchase $500 billion worth of US goods over five years, including energy products, aircraft and parts, precious metals, technology products, coking coal
Both sides to expand technology trade, including Graphics Processing Units (GPUs) and data centre equipment
Framework to be implemented promptly
Countries to finalise interim agreement while continuing negotiations toward a full bilateral trade agreement.