US and India Forge Landmark Interim Trade Agreement: Check Key Highlights

The United States and India have announced a framework for an Interim Trade Agreement aimed at strengthening reciprocal and mutually beneficial trade. This step reaffirms both nations’ commitment to the broader U.S.-India Bilateral Trade Agreement (BTA) negotiations, first launched by President Trump and Prime Minister Modi in February 2025, with a focus on market access, resilient supply chains, and shared economic growth.

This Interim Agreement marks a historic milestone in U.S.-India relations, reflecting a shared commitment to balanced trade and tangible outcomes for businesses and consumers in both countries.

Key Highlights of the Agreement

• Tariff Reductions: India will reduce or remove tariffs on U.S. industrial goods and agricultural products, including nuts, fruits, soybean oil, wine, and spirits. The U.S. will apply a reciprocal tariff on certain Indian goods like textiles, leather, home décor, and machinery, while removing tariffs on items such as generic pharmaceuticals, gems, and aircraft parts.
• National Security Adjustments:The U.S. will lift tariffs on select Indian aircraft and parts tied to previous national security measures, while India will provide preferential access for certain automotive components.
• Market Access & Standards: Both nations will offer preferential market access in key sectors and align rules of origin to ensure trade benefits are mutual. India will address longstanding barriers affecting U.S. medical devices, ICT products, and food exports. The countries will also coordinate on technical standards and conformity assessments to simplify trade.
• Digital Trade & Technology Cooperation: The agreement sets a pathway for enhanced digital trade, technology cooperation, and joint investment reviews, supporting growth in sectors like GPUs, data centers, and other high-tech products.
• Trade Commitments: India plans to purchase $500 billion in U.S. goods over the next five years, including energy, aircraft, technology, and precious metals. Both nations aim to strengthen supply chain resilience and innovation while reducing barriers in key sectors.

Also Read: India, US Agree on Trade Deal, Lowering Reciprocal Tariffs to 18%

This framework lays a strong foundation for the ongoing BTA negotiations, signalling a new era of U.S.-India trade relations that is balanced, forward-looking, and mutually beneficial.

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