New Delhi, February 7, 2026 – A recently finalized India-US trade agreement is set to unlock a $30 trillion market for Indian exporters, according to Commerce and Industry Minister Piyush Goyal. The interim trade agreement framework is expected to particularly benefit Micro, Small, and Medium Enterprises (MSMEs), farmers, and fishermen, while also generating numerous job opportunities for women and youth.

Goyal conveyed his optimism in a statement, highlighting the "decisive leadership" of Prime Minister Narendra Modi in reaching this agreement with the United States. He emphasized that the deal will grant Indian exporters access to a massive $30 trillion market, which is equivalent to the U.S.'s annual GDP.

The agreement comes after nearly a year of trade tensions between the two countries and shortly after India concluded a free trade agreement with the European Union on January 27, 2026.

Under the new framework, India has agreed to eliminate or reduce tariffs on all U.S. industrial goods and a wide array of American food and agricultural products. These include items such as dried distillers' grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine, and spirits. This move aims to ease access for U.S. exporters to the Indian market and address long-standing issues related to medical devices, food products, and technology goods.

In return, the United States will apply a reciprocal tariff rate of 18% on Indian-origin goods under an executive order governing reciprocal trade practices. These goods include textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, artisanal products, and certain categories of machinery. The U.S. will also remove tariffs on certain aircraft and aircraft parts from India that were previously imposed on national security grounds.

Furthermore, India intends to purchase $500 billion worth of U.S. energy, aviation products, precious metals, technology goods, and coking coal over the next five years, which is expected to significantly boost bilateral trade volumes. India is reportedly considering large-scale aircraft purchases from Boeing, with potential orders valued at up to US$80 billion, as part of the broader trade understanding.

The White House also released a joint statement, noting that India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products.

While the U.S. tariff reductions are being implemented through executive action, India's tariff adjustments will follow a different legal route, requiring formal authorization due to Most Favored Nation (MFN) tariff commitments. A formal legal agreement is expected to be signed by mid-March 2026, providing India with the legal basis to reduce import duties on U.S. goods.

External Affairs Minister S Jaishankar described the "historic" trade agreement as being in the final stages of detailing, which will be completed "very soon". He anticipates that the trade deal will usher in a "new phase" in relations between the two countries.

However, some analysts remain skeptical about India's ability to realistically achieve the US$500 billion procurement target from the U.S. In FY 2024–25, India imported goods worth US$721.2 billion from all trading partners, of which imports from the US accounted for about US$45 billion. Sourcing US$500 billion from the U.S. alone would require India to significantly reconfigure its import mix.