- By Shubham Bajpai
- Sat, 07 Feb 2026 08:40 AM (IST)
- Source:JND
India and the United States of America have unveiled a framework for an interim bilateral trade agreement. The White House released a joint statement announcing the development early morning on Saturday, days after both, US President Donald Trump and Prime Minister Narendra Modi, announced that they reached a consensus for the deal.
On Monday, India and US reached a breakthrough after Trump announced to slash reciprocal tariff on Indian goods to 18 per cent and remove the penalising 25 per cent tariff, imposed for buying the Russian crude.
On Saturday, Trump also signed an executive order lifting that punitive 25 per cent tariff on India.
What does the interim agreement framework says about future BTA?
- The White House has also indicated that it would consider to further reduce tariffs on Indian goods during the talks on India's request.
- As the most contentious issue remained around the agriculture and dairy, India has agreed to eliminate or significantly reduce tariffs on a broad range of US food and agricultural products. These include dried distillers’ grains (DDGs), tree nuts, red sorghum used for animal feed, fresh and processed fruits, soybean oil, as well as wine and spirits.
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- The US will apply a reciprocal tariff of 18 per cent on textiles and apparel, leather and footwear, plastics organic chemicals, home décor, rubber, artisanal products and certain categories of machinery.
- The US will remove the reciprocal tariff on gems, diamond and generic pharmaceuticals once the interim trade agreement is concluded.
- The tariffs of certain Indian aircrafts and aircraft parts, imposed on national security grounds under separate orders covering steel, copper and aluminium, will be lifted.
- Under the framework, India will get preferential tariff quota for exporting automotive parts to the United States.
- India and US will provide each other a sustained and preferential market access in sectors that are of mutual interest. As part of this, rules of origin will be established so that benefits of the potential agreement accrue to both counties.
- Apart from tariff barriers, India has also agreed to resolve long-standing issues affecting US products like medical devices.
- According to the agreed framework, if either country changes its tariff levels in the future, the other side will have the right to change its commitments accordingly.
- The statement reiterated India intention to buy goods worth $500 billion from the US over the next five years. These purchases are likely to include energy products, aircraft and aircraft parts, etc.