Picture Credit : @USAmbIndia/X
India and the United States have announced that they have reached a framework for an interim trade agreement under which tariffs on New Delhi will be reduced to 18 per cent.
As per the agreement, India will eliminate or reduce tariffs on all US industrial goods and a wide range of American food and agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
“The US and India are pleased to announce that they have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade,” a joint statement issued by both the countries said.
“It was an Honor to speak with Prime Minister Modi, of India, this morning… He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine” – President Donald J. Trump 🇺🇸 pic.twitter.com/RD7PZ8S16z
— The White House (@WhiteHouse) February 2, 2026
It added that the framework reaffirms the countries’ commitment to the broader US-India Bilateral Trade Agreement negotiations launched by President Donald J Trump and Prime Minister Narendra Modi on February 13, 2025, which will include additional market access commitments and support more resilient supply chains.
As per the key terms of the agreement, the US will reduce the import duty on Indian goods to 18 per cent.In August last year, the US imposed a 25 per cent reciprocal tariff and an additional 25 per cent levy on India over its purchase of Russian oil. Indian exporters were hit hard by the 50 per cent tariffs, as America is their largest export destination.
The reduction in the tariffs will help boost exports of India’s labour-intensive sectors such as textile and apparel, leather and footwear, plastic and rubber, organic chemicals, home decor, artisanal products and certain machinery.
Subject to the successful conclusion of the interim agreement, tariffs will go down to zero on a wide range of goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts, thereby further enhancing India’s export competitiveness and the Make in India campaign, according to the statement.
It said the US will also remove tariffs on certain aircraft and aircraft parts of India.
“Similarly, consistent with the US national security requirements, India will receive a preferential tariff rate quota for automotive parts subject to the tariff imposed to eliminate threats to national security,” it added.
The statement said that both the countries commit to provide each other preferential market access in sectors of respective interest on a sustained basis.
The two will also establish rules of origin that ensure that the benefits of the agreement accrue predominantly to the US and India.
Further it was agreed that the two will address non-tariff barriers that affect bilateral trade, which stood at over USD 191 billion.
The statement said that India has agreed to address long-standing barriers to the trade in US medical devices.
