The United States and India have announced an interim trade framework to reduce tariffs on Indian goods, with India also set to buy US$500 billion of U.S. products.
Most Indian goods would see an 18% tariff rate in the U.S., falling from the previous 50%. The interim terms will take effect immediately, with finalised deal expected in March, according to India’s Trade Minister Piyush Goyal.
“Today’s framework reaffirms the countries’ commitment to the broader U.S.-India Bilateral Trade Agreement (BTA) negotiations, launched by President Donald J. Trump and Prime Minister Narendra Modi on February 13, 2025, which will include additional market access commitments and support more resilient supply chains,” the U.S. and Indian governments wrote in a statement.
Under the interim framework, India will lower or remove tariffs on all U.S. industrial goods and many agricultural products. Meanwhile, some Indian exports including aircraft parts, gems, and generic pharmaceuticals will be exempted from U.S. tariffs.
India would also purchase $500 billion of U.S. products, including energy goods, aircraft, precious metals, and technology products. This is similar to terms the U.S. has given to other nations like Japan and South Korea, which are set to invest $550 billion and $350 billion in the U.S. under their respective trade deals.
The U.S. also separately removed the 25% tariff it had added on Indian goods over India’s purchases of Russian oil, saying the country had committed to ending Russian oil imports.
India has been winding down its Russian oil purchases in recent months, having fallen from 1.2 million barrels per day in January to a projected 1 million barrels per day in February, per Reuters.
Oil refiners in India, such as Indian Oil and Bharat Petroleum, are also reportedly not accepting new offers for Russian oil deliveries in March and April.
