- US, India unveil interim trade framework, deal likely next month.
- US tariffs are lowered to 18%, India switches from Russian oil to US energy.
- India will cut tariffs on US industrial and agricultural goods.
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.
The framework reaffirms a commitment to negotiations towards a broader bilateral trade agreement, the two governments said in a joint statement, while noting that further negotiations were needed to complete the pact.
US President Donald Trump on Monday announced a deal with India to lower US tariffs on Indian goods to 18% from 50% in return for India stopping purchases of Russian oil and lowering trade barriers.
Half the 50% rate had been imposed separately by Trump as punishment for India’s purchases of Russian oil, which he said was fueling Moscow’s war effort in Ukraine. Trump signed an executive order on Friday lifting that 25% share after India agreed this week to shift its oil purchases to the United States and Venezuela.
New details on tariff reductions
Friday’s joint statement provides additional details compared to the initial outlines of the trade deal that Trump unveiled on Monday.
It confirms that India will buy $500 billion in US goods over five years, including oil, gas, coking coal, aircraft and aircraft parts, precious metals and technology products. The last category includes graphics processing units typically used for AI applications and other items used in data centers.
It said India would eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers grains and red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.
The US maintains a tariff of 18%
But the deal will apply an 18% tariff to most imports into the US from India, including textiles and clothing, leather and footwear, plastics and rubber, organic chemicals, home furnishings, craft products and certain machinery.
India will be given the same duty exemption to other allied countries that have signed trade agreements with the US on certain aircraft and aircraft parts, and will receive a quota for auto parts imports, which will be subject to a lower duty rate, according to the statement.
Depending on the results of the Trump administration’s customs investigation of pharmaceuticals and their ingredients, “India will receive negotiated outcomes with respect to generic drugs and ingredients,” the statement said.
Indian Commerce Minister Piyush Goyal hailed the framework agreement in a social media post on X for opening up a market worth $30 trillion – the US’s annual GDP – for Indian exporters, particularly farmers, fishermen and micro, small and medium enterprises.
Goyal had said on Thursday that Washington and New Delhi aimed to sign a formal trade deal in March, after which India’s tariff cuts on US exports would take effect.
Accepts US standards
India also agreed to address long-standing non-tariff barriers to imports of agricultural products, medical equipment and communications equipment, with negotiations to be concluded within six months on an agreement to accept US or international safety and licensing standards for product imports.
The US confirmed that it intends to consider India’s requests for lower tariffs on Indian goods during further negotiations on the bilateral trade agreement. The two sides also agreed to cooperate on the enforcement of export controls on sensitive technologies and take steps to counter “non-market policies of third parties,” a reference to China.
The US and India have struggled for years to reach a full trade deal, with disputes spanning agriculture, digital commerce, medical devices and market access. But strategic concerns — including competition with China, supply chain diversification and energy security — have added new urgency to the talks, officials in both countries say.
