The United States has described its newly announced interim trade agreement with India as a “historic” breakthrough that will significantly expand access for American goods to the Indian market, while laying the groundwork for a broader Bilateral Trade Agreement (BTA).
In a fact sheet released days after a joint statement by New Delhi and Washington, the White House said the two sides will work in the coming weeks to finalise the interim pact, even as negotiations continue on unresolved areas such as services, investment, labour and government procurement.
According to the fact sheet titled "The United States and India Announce Historic Trade Deal (Interim Agreement)," India has agreed to eliminate or reduce tariffs on all US industrial goods and on a wide range of American food and agricultural products. These include dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruits, certain pulses, soybean oil, wine and spirits, among others.
The document also said India has committed to significantly increase purchases of American products, including energy, information and communication technology, agricultural goods and coal, with total purchases projected to exceed $500 billion over time.
From Washington’s perspective, the agreement is positioned as a major step in correcting what it calls long-standing trade imbalances. The White House noted that India has historically maintained some of the highest tariffs among major economies, averaging around 37 percent on agricultural goods and exceeding 100 percent on certain automobiles, alongside restrictive non-tariff barriers.
As part of the roadmap towards a full BTA, the US and India will continue negotiations on a wide range of issues, including remaining tariff barriers, technical and regulatory barriers, customs facilitation, trade remedies, services and investment, intellectual property rights, labour and environmental standards, government procurement and the role of state-owned enterprises.
A key element of the interim framework is the negotiation of rules of origin to ensure that trade benefits accrue predominantly to the US and India, limiting the scope for third-country routing.
The fact sheet also said India will remove its digital services taxes and has committed to negotiate a comprehensive set of bilateral digital trade rules. These would address what the US describes as discriminatory or burdensome digital practices and include provisions prohibiting customs duties on electronic transmissions.
On the strategic front, both countries have agreed to deepen economic security cooperation to strengthen supply chain resilience, align on export controls and investment screening, and expand bilateral trade and joint collaboration in technology sectors.
The announcement follows a recent call between Trump and Prime Minister Narendra Modi, during which the leaders agreed on the framework for reciprocal trade and reaffirmed their commitment to a comprehensive BTA.
The White House also confirmed that Trump has removed the additional 25 percent tariff on Indian imports, citing India’s commitment to stop purchasing Russian oil. As part of this move, the reciprocal tariff on India has been reduced from 25 percent to 18 percent through an executive order signed last week.
Washington said the interim agreement provides a “tangible path forward” in US-India trade relations, while reinforcing the administration’s push for what it terms balanced and reciprocal trade with key partners.
