India and the United States have agreed on a framework for an interim trade agreement. Under this, India will remove or reduce tariffs on all U.S. industrial goods and a wide range of agricultural products. In return, the United States will cut tariffs on Indian imports from 50% to 18%, following amendments to relevant executive orders.
A separate U.S. executive order, signed by Donald Trump, has already removed the additional 25% tariff imposed in August 2025 as a penalty linked to India’s import of Russian oil. The remaining tariff reduction to 18% is expected next week.
India will implement its tariff cuts after the interim agreement is formally signed, likely by mid-March, according to Piyush Goyal.
Narendra Modi said the framework deepens trust between the two countries and supports Make in India, benefiting farmers, MSMEs, startups, and job creation.
Covered U.S. exports include industrial goods and food/agricultural items such as animal feed, tree nuts, fruits, soybean oil, wine, and spirits. Both sides will grant preferential market access and set rules of origin to ensure benefits mainly accrue to India and the U.S.
Additionally, India plans to purchase $500 billion worth of U.S. goods—including energy products, aircraft and parts, precious metals, technology products, and coking coal—over the next five years.
- S. has already removed the 25% tariff; the remaining 25% will be lowered to 18%.
- India to reduce tariffs for US goods only after a normal deal is signed.
- Sensitive agricultural items and dairy were kept out of the deal.
- Both countries can modify their commitment if one of them changes the agreed-upon tariff.
