India and US reach trade framework: What's included?
Tariff relief for Indian goods hinges on finalisation of interim US trade deal
The US has agreed to remove the 18 per cent reciprocal tariff on a wide range of Indian goods only after the interim trade agreement is successfully concluded, according to the joint statement issued by India and the United States on Saturday.
Until the agreement is finalised, the US would continue to apply the reciprocal tariff on Indian exports such as textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home décor, artisanal products, and select machinery.
Subject to the completion of the interim deal, tariffs are proposed to be removed on products including generic pharmaceuticals, gems and diamonds, and aircraft parts.
The framework for the interim agreement was announced as part of ongoing negotiations toward a broader India-US Bilateral Trade Agreement (BTA), launched by US President Donald Trump and Prime Minister Narendra Modi in February 2025.
Under the proposed framework, India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fruits, soybean oil, wine, and spirits.
At the same time, India has fully protected sensitive agricultural and dairy products such as wheat, rice, maize, soya, poultry, milk, cheese, certain vegetables, and meat to safeguard farmers’ interests and rural livelihoods.
The joint statement also provides for exemptions under Section 232 for certain aircraft and aircraft parts, preferential tariff-rate quotas for automotive parts, and negotiated outcomes for generic pharmaceuticals, subject to regulatory and national security reviews.
Both sides agreed to address non-tariff barriers affecting bilateral trade, establish rules of origin to ensure benefits accrue primarily to the two countries, and work toward expanding market access through continued BTA negotiations.
Officials said the interim framework seeks to balance market access commitments with domestic sensitivities, even as talks continue on a comprehensive trade agreement.
