Indis-US trade deal:No Compromise on Dairy and Agriculture Sectors, India-US Release Trade Deal Framework

New Delhi: The United States and India on Friday released a framework for an interim trade agreement, giving new momentum to finalizing a comprehensive bilateral trade agreement between the two countries. The announcement comes amidst extended negotiations and recent tariff tensions, signaling renewed momentum in economic relations between the two sides.

In a joint statement, the two countries said, “The United States and India will expeditiously implement this framework and work towards finalizing the interim agreement to conclude a mutually beneficial bilateral trade agreement (BTA) as soon as possible.” Both countries described it as a historic milestone in their partnership.

Union Commerce Minister Piyush Goyal, while releasing the framework for the interim trade agreement with the US, wrote in an ‘X’ post, “Under the decisive leadership of Prime Minister Modi, India has forged a robust framework for an interim trade agreement with the US. This will open doors to the vast $30 trillion market for Indian exporters – especially MSMEs, farmers, and fishermen. Increased exports will create millions of new job opportunities for women and youth.”

He further added, “Under this framework, the US will reduce reciprocal tariffs on Indian goods by 18%, giving Indian products from key sectors such as textiles and apparel, leather and footwear, plastics and rubber products, organic chemicals, home decor, handicrafts, and select machinery greater access to the world’s largest economy. Additionally, tariffs will be eliminated on several items, including generic pharmaceuticals, gems and diamonds, and aircraft parts, further strengthening India’s export competitiveness and Make in India initiative.” Indian Farmers’ Interests Fully Protected
Piyush Goyal said, “This agreement reflects India’s commitment to protecting the interests of farmers and sustaining rural livelihoods. Sensitive agricultural and dairy products such as maize, wheat, rice, soy, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables, and meat have been fully protected. This agreement will help India and the US move forward with a shared resolve to deepen their economic cooperation, reflecting sustainable growth for our citizens and businesses.”

Trump Removes 25% Punitive Tariff on India
Prior to this interim agreement, earlier this week, US President Donald Trump announced that Washington and New Delhi had reached an agreement under which the US would reduce tariffs on Indian goods from 50% to 18%. Trump claimed that in return, India would stop buying Russian oil and reduce its trade barriers. He said that India would now start buying oil from the US and possibly from Venezuela as well. On Friday, Trump signed an executive order completely removing the 25% punitive tariff imposed on India due to its purchase of Russian oil. India’s Commerce Minister Piyush Goyal had said on Thursday that both sides are aiming to sign a formal trade agreement by March, after which India will reduce tariffs on several products imported from the US.

What will the two countries buy and sell from each other?
According to the news agency, under the framework, India will either remove or reduce its tariffs on US industrial and agricultural products, including nuts, fruits, soybean oil, wine, and other food products. The US will also impose a reciprocal tariff of 18% instead of 25% on Indian goods such as textiles, apparel, chemicals, and machinery. In addition, the US has agreed to remove tariffs on Indian aircraft and aircraft parts under national security provisions, while India will receive a priority tariff-rate quota on auto parts.

Talks to focus on removing non-tariff barriers
Both sides will now hold further discussions on issues such as generic pharmaceuticals and non-tariff barriers. India has stated that it intends to purchase $500 billion worth of energy products, aircraft, precious metals, technology products, and coking coal from the US over the next five years. Both sides have agreed to increase trade in technology goods, including components used in data centers. India and the US have described this initial agreement as a positive sign towards further deepening trade relations between the two countries and said that its completion will take the bilateral economic partnership to new heights.