India and the United States are preparing to sign the first tranche of a formal, legally binding trade agreement by mid-March, signalling a breakthrough in talks that had stalled after sharp tariff hikes last year.
Commerce and industry minister Piyush Goyal said the process would begin with a joint statement, which is expected to be signed virtually within the next four to five days. The joint statement will lay the groundwork for drafting the formal agreement.
Based on the framework outlined in the statement, the legal text of the trade deal is expected to take about a month to six weeks to finalise, with both sides targeting a mid-March signing.
The two sides have agreed on a phased approach to tariff reductions.
Once the joint statement is signed, the US will reduce tariffs on Indian products to 18 percent from the earlier 50 percent level
The reduction on the US side will be implemented through a White House executive order
India, in contrast, will cut tariffs on agreed products only after the formal agreement is signed and comes into force
This sequencing reflects differences in domestic approval processes between the two countries.
The latest push came after US President Donald Trump announced earlier this week that a trade deal with India had been finalised and that tariffs would be brought down sharply.
The announcement followed months of tension after Washington imposed steep duties on Indian exports in August 2025. These included a 25 percent punitive tariff linked to India’s continued purchases of Russian oil, pushing total duties on some products to as high as 50 percent.
The tariffs had disrupted trade flows and added pressure on exporters across several sectors.
Once signed, the agreement will become India’s ninth trade deal concluded in the past five years, underlining New Delhi’s push to secure market access through bilateral arrangements.
The US remains India’s largest export destination. In the 2024–25 financial year, India exported goods worth $86.5 billion (about ₹7.18 lakh crore) to the US, while imports stood at $45.6 billion (around ₹3.78 lakh crore).
Analysts see the agreement as a key step in restoring stability to India-US trade ties after a volatile year marked by tariffs and geopolitical frictions.
