After nearly a year of trade tensions, India and the United States have reached a framework for an interim agreement on reciprocal and mutually beneficial trade. The White House issued a joint statement early Saturday, reaffirming both countries' commitment to broader India–US Bilateral Trade Agreement (BTA) negotiations, which were initially launched by Prime Minister Narendra Modi and then U.S. President Donald Trump in February 2025.
Under the interim agreement, India will eliminate or significantly reduce tariffs on all U.S. industrial goods and a wide range of American food and agricultural products. These products include dried distillers' grains (DDGs), red sorghum used for animal feed, tree nuts, fresh and processed fruits, soybean oil, as well as wine and spirits. The United States, in turn, will apply a reciprocal tariff rate of 18 percent 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 lift tariffs on certain aircraft and aircraft parts from India that were earlier imposed on national security grounds. Subject to the successful conclusion of the interim agreement, Washington will also remove reciprocal tariffs on a wide range of Indian exports, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
President Trump also signed an executive order, removing the additional 25 percent tariff imposed on India over its Russian oil imports. India has committed to stop directly or indirectly importing Russian Federation oil. New Delhi has also stated it will purchase US energy products.
The interim agreement represents a historic milestone in the countries' partnership, demonstrating a common commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes. The framework also includes commitments to additional market access and support for more resilient supply chains.
While the full legal text of the deal is not yet available, the US plans to reduce tariffs on Indian exports to 18 percent. India is expected to lower duties on certain US goods and significantly increase purchases of American products. U.S. Secretary of Agriculture Brooke Rollins has claimed that under this deal, India will import huge volumes of American farm products, which will boost the rural American economy and reduce America's agricultural trade deficit with India.
India's agriculture minister, Shivraj Singh Chouhan, stated that the deal fully safeguards India's agricultural interests, particularly in the farm and dairy sectors. He added that staple grains, fruits, major crops, millets and dairy products remain completely secure. Reduced tariffs will directly benefit India's rice, spices and textile exports, and growth in textile exports will help millions of cotton-growing farmers.
Some experts believe that the interim trade framework could modestly reshape agricultural trade between the two countries, with tariff relief, clearer rules, and reduced non-tariff barriers at the center of discussions. Likely beneficiaries include oilseeds and vegetable oils, cotton, specialty crops such as tree nuts, and select feed ingredients. India has emphasized that politically sensitive sectors, particularly dairy and biotechnology, will remain protected. India is seeking smoother access to the U.S. market for rice, processed foods, spices, and seafood, along with more predictable customs procedures.