United States–India interim trade agreement framework: comprehensive report

The United States of America and India have agreed on a framework for an Interim Agreement on reciprocal and mutually beneficial trade, reaffirming their commitment to concluding a broader U.S.–India Bilateral Trade Agreement (BTA). The announcement was made through a joint statement issued on February 7.

The framework builds on the BTA negotiations launched by U.S. President Donald J. Trump and Prime Minister Narendra Modi on February 13, 2025, and aims to expand market access, ensure balanced trade, strengthen supply chains, and deepen economic and strategic cooperation between the two countries. Both sides described the Interim Agreement as a historic milestone in the U.S.–India partnership.

Trade and Tariff Commitments

Under the framework, India will eliminate or reduce tariffs on all U.S. industrial goods and a broad range of U.S. food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits, and other products.

The United States will apply a reciprocal tariff rate of 18 percent on Indian-origin goods under Executive Order 14257 dated April 2, 2025. These tariffs will cover sectors such as textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, artisanal products, and certain machinery.

Subject to the successful conclusion of the Interim Agreement, the United States will remove reciprocal tariffs on a wide range of Indian goods listed in the Potential Tariff Adjustments for Aligned Partners Annex under Executive Order 14346 dated September 5, 2025. These goods include generic pharmaceuticals, gems and diamonds, and aircraft parts.

National Security–Related Adjustments

The United States will also remove tariffs on certain aircraft and aircraft parts from India that were imposed under national security provisions relating to aluminum, steel, and copper imports, as outlined in Proclamations 9704 and 9705 (March 8, 2018) and Proclamation 10962 (July 30, 2025).

In return, and consistent with U.S. national security requirements, India will receive a preferential tariff rate quota for automotive parts subject to tariffs imposed under Proclamation 9888 dated May 17, 2019.

Further, outcomes related to generic pharmaceuticals and pharmaceutical ingredients will depend on the findings of the ongoing U.S. Section 232 investigation into those products.

Market Access, Rules, and Regulatory Cooperation

Both countries are committed to providing each other with preferential market access on a sustained basis in sectors of mutual interest. They will establish rules of origin to ensure that the benefits of the Agreement accrue predominantly to the United States and India.

India agreed to address long-standing non-tariff barriers affecting bilateral trade. These include barriers related to U.S. medical devices, restrictive import licensing procedures for U.S. Information and Communication Technology (ICT) goods, and quantitative restrictions that delay market access.

India will determine, within six months of the Agreement’s entry into force, whether U.S.-developed or international standards, including testing requirements, can be accepted for U.S. exports entering the Indian market in identified sectors. India is also committed to addressing long-standing non-tariff barriers affecting U.S. food and agricultural products.

To improve ease of compliance, the United States and India will hold discussions on standards and conformity assessment procedures in mutually agreed sectors.

Safeguards and Future Negotiations

The framework includes a safeguard provision under which either country may modify its commitments if the other side changes agreed tariff levels.

Both sides will continue negotiations to expand market access through the Bilateral Trade Agreement. The United States stated that it intends to take into consideration India’s request for further lowering of tariffs on Indian goods during the BTA negotiations.

Economic Security, Technology, and Supply Chains

The United States and India agreed to strengthen economic security alignment to improve supply chain resilience and innovation. This includes cooperation on addressing non-market policies of third parties, coordination on inbound and outbound investment reviews, and collaboration on export controls.

As part of this broader economic engagement, India intends to purchase USD 500 billion worth of U.S. goods over the next five years. These purchases will include energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal.

The two countries will also significantly increase trade in technology products, including Graphics Processing Units (GPUs) and other goods used in data centers, and expand joint technology cooperation.

Digital Trade Commitments

Both sides are committed to addressing discriminatory or burdensome practices that affect digital trade. They agreed to establish a clear pathway toward robust, ambitious, and mutually beneficial digital trade rules, which will form part of the broader Bilateral Trade Agreement.