India-US interim trade deal framework: Key highlights

India and the United States moved closer to a landmark trade pact on Friday, unveiling an interim trade framework aimed at lowering tariffs, strengthening energy ties, and deepening economic cooperation. The move comes as both nations seek to realign global supply chains and enhance trade resilience.

Read more: India-US interim trade deal framework unveiled

Key Points of the Joint Statement

The framework is part of ongoing negotiations toward a broader U.S.-India Bilateral Trade Agreement (BTA) launched in February 2025. Officials described the deal as a step towards reciprocal, balanced trade and greater supply chain security.

India’s Tariff Actions

Under the interim framework, India has agreed to:

• Eliminate or reduce tariffs on all U.S. industrial goods.
• Cut duties on a wide range of U.S. farm and food products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fruits, soybean oil, wine, and spirits.
• Provide preferential market access in agreed sectors to facilitate smoother trade.

U.S. Tariff Actions

The United States will:

• Apply an 18% reciprocal tariff on most Indian goods, including textiles, apparel, leather, footwear, plastics, rubber, organic chemicals, home décor, artisanal products, and certain machinery.
• Remove reciprocal tariffs on a wide range of Indian goods once the interim deal is successfully implemented, covering sectors such as generic pharmaceuticals, gems and diamonds, and aircraft parts.

Steel, Aluminium, and Auto Parts

The framework also addresses tariffs linked to U.S. national security rules:

• Certain Section 232 tariffs on Indian aircraft and aircraft parts related to steel, aluminium, and copper will be removed.
• India will receive a preferential tariff-rate quota for auto parts.
• Pharmaceutical tariffs will be reviewed in line with the ongoing U.S. Section 232 investigation.

Non-Tariff Barriers

India has agreed to review long-standing barriers affecting imports of:

• U.S. medical devices.
• Information and Communication Technology (ICT) goods.
• Food and agricultural products.

Negotiations will include acceptance of U.S. or international standards and testing rules in key sectors within six months. Both sides will discuss standards and conformity assessment procedures to simplify trade.

Rules, Safeguards, and Digital Trade

The agreement sets rules of origin to ensure benefits primarily go to Indian and U.S. producers. Either side may modify commitments if tariffs are changed. Both countries also pledged to address burdensome digital trade practices and work towards establishing digital trade rules under the full BTA.

Supply Chains and Security

The framework highlights cooperation on economic security, supply chain resilience, investment reviews, export controls, and measures to counter non-market policies of third countries, with a likely reference to China.

India’s Purchase Commitments

India intends to purchase $500 billion worth of U.S. goods over five years, including energy products, aircraft and parts, precious metals, technology products, and coking coal. The deal also aims to expand technology trade, including graphics processing units (GPUs) and data centre equipment.

Next Steps

The interim framework is set to be implemented promptly. Both nations will finalise the agreement while continuing negotiations toward a full bilateral trade deal, aiming for greater market access, economic cooperation, and strategic alignment.


Inputs from agencies