India-US Trade Deal Framework: Tariff-Free Access for Key Sectors
As India and the United States announced the framework for a bilateral trade deal, India will receive tariff-free access to certain aircraft and aircraft parts from the US, according to a joint statement released on Saturday. The statement noted that India will also obtain a preferential tariff rate quota (TRQ) for automotive parts, subject to applicable tariffs. Additionally, India is set to gain “negotiated outcomes” regarding generic pharmaceuticals and ingredients.
“The United States and India commit to provide each other preferential market access in sectors of respective interest on a sustained basis,” the joint statement said. Both countries have agreed to an Interim Agreement framework, reaffirming their commitment to the broader US-India Bilateral Trade Agreement (BTA) negotiations launched by President Donald Trump and Prime Minister Narendra Modi on February 13, 2025. This framework will include further market-access commitments and measures to strengthen supply chain resilience.
Tariff Reductions And Agricultural Protections
India has agreed to eliminate or reduce tariffs on all US industrial goods, as well as a wide range of US food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, among others. India secured protections for sensitive sectors, particularly agriculture and dairy, which had delayed the deal from the originally planned timeline of fall 2025. Both nations also pledged to address non-tariff barriers affecting bilateral trade.
India will tackle long-standing barriers in US medical devices and remove restrictive import licensing procedures affecting US ICT goods. Similarly, India will address non-tariff barriers impacting US food and agricultural exports. The United States confirmed that it will continue working to lower tariffs on Indian goods as part of the broader BTA negotiations.
Boosting Trade And Technology Cooperation
India plans to purchase USD 500 billion worth of US energy products, aircraft, aircraft parts, precious metals, technology products, and coking coal over the next five years. Both nations also agreed to expand trade in technology products, including Graphics Processing Units (GPUs) and data center equipment, alongside enhanced joint technology cooperation.
The announcement followed a February 2 phone call between Prime Minister Narendra Modi and US President Donald Trump, which concluded negotiations on the long-awaited trade deal. The Trump administration had previously imposed tariffs of up to 50% on Indian goods entering the US since August 2025. These tariffs have now been reduced to 18% following the leaders’ recent discussions.
The BTA, formally proposed in February 2025, aims to more than double bilateral trade from USD 191 billion to USD 500 billion by 2030.
(This article has been syndicated from ANI)
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