The United States and India announced an interim reciprocal trade framework aimed at cutting tariffs, reshaping energy ties and strengthening economic cooperation as both countries seek more resilient global supply chains. The following summarizes the 10 main points of the joint statement.
1) What was announced
Both countries agreed on a framework for an interim reciprocal trade agreement, as part of broader Bilateral Trade Agreement (BTA) talks launched on Feb. 13, 2025. The objective is a balanced, reciprocal deal that improves supply chain resilience.
2) India’s tariff actions
India will eliminate or reduce tariffs on all U.S. industrial goods and cut duties on a broad set of U.S. agricultural and food products, including dried distillers’ grains (DDGs), red sorghum for feed, tree nuts and fruits, soybean oil, wine and spirits. India will also offer preferential market access in specified sectors.
3) U.S. tariff actions
The U.S. will implement an 18% reciprocal tariff on Indian-origin goods under existing executive orders. Initial coverage includes textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home decor and artisanal goods, and certain machinery. Following successful completion of the interim deal, the U.S. will remove reciprocal tariffs on many Indian products, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
4) Steel, aluminium and auto parts
The U.S. will lift certain Section 232 tariffs on Indian aircraft and aircraft parts linked to measures on steel, aluminium and copper. India will receive a preferential tariff-rate quota for auto parts under U.S. national security tariff rules. Outcomes for pharmaceutical tariffs remain contingent on an ongoing U.S. Section 232 probe.
5) Non-tariff barriers
India has committed to address long-standing non-tariff barriers affecting U.S. medical devices, ICT goods import licensing, and U.S. food and agricultural products. India will review acceptance of U.S. or international standards and testing rules within six months in identified sectors. Both sides will discuss standards and conformity assessment procedures.
6) Rules and safeguards
The agreement will include rules of origin to ensure benefits accrue primarily to U.S. and Indian producers. Either side can modify commitments if the other changes agreed tariffs, providing built-in safeguard mechanisms.
7) Digital trade
Both countries pledged to curb discriminatory or unduly burdensome digital trade practices and to work toward digital trade rules as part of the full BTA.
8) BTA, supply chains and security
The framework calls for alignment on economic security and supply chain resilience, with cooperation on investment reviews, export controls, and responses to non-market practices by third countries.
9) India purchase commitments
India indicated an intention to purchase $500 billion of U.S. goods over five years, spanning energy products, aircraft and parts, precious metals, technology products and coking coal. The countries also plan to expand technology trade, including GPUs and data center equipment.
10) Next steps
The framework is to be implemented promptly. Parties will finalize the interim agreement while continuing negotiations toward a full bilateral trade agreement.
