India-US Interim Trade Deal Framework

India and the United States have unveiled an interim trade framework aimed at lowering tariffs, strengthening energy ties, and deepening economic cooperation. This is a step towards realigning global supply chains and enhancing trade resilience.

Key Points of the Joint Statement

• The framework is a precursor to a broader U.S.-India Bilateral Trade Agreement (BTA) initiated in February 2025.
• The agreement aims for reciprocal, balanced trade and enhanced supply chain security.

India’s Tariff Actions

• Eliminate or reduce tariffs on all U.S. industrial goods.
• Cut duties on various U.S. farm and food products like dried distillers' grains, red sorghum, tree nuts, and more.
• Provide preferential market access in selected sectors.

U.S. Tariff Actions

• Apply an 18% tariff on most Indian goods including textiles, apparel, and more.
• Remove tariffs on Indian goods such as generic pharmaceuticals and aircraft parts once the interim deal is in effect.

Steel, Aluminium, and Auto Parts

• Removal of certain Section 232 tariffs on Indian aircraft parts related to steel, aluminium, and copper.
• India will receive a preferential tariff-rate quota for auto parts.

Non-Tariff Barriers

• India will review barriers affecting imports of U.S. medical devices, ICT goods, and agricultural products.
• Negotiations will aim to accept U.S. or international standards within six months.

Rules, Safeguards, and Digital Trade

• Set rules of origin to ensure benefits to Indian and U.S. producers.
• Commitments may be modified if tariffs change.
• Address burdensome digital trade practices and work towards digital trade rules.

Supply Chains and Security

• Focus on economic security, supply chain resilience, and countering non-market policies, possibly referring to China.

India’s Purchase Commitments

• India plans to purchase $500 billion worth of U.S. goods in five years, including energy products and technology.

Next Steps

• The interim framework will be implemented promptly.
• Continuation of negotiations towards a full bilateral trade deal for greater market access and strategic alignment.