The United States and India have reached a framework for an interim trade agreement, effective February 7, 2026, signaling a fresh start for bilateral trade relations. This framework follows months of negotiations and sets the stage for a more comprehensive Bilateral Trade Agreement (BTA).

Here are the top 10 things to know about this interim trade deal:

1. Tariff Reduction: The U.S. will reduce import duties on Indian goods to 18%. Previously, some Indian goods faced tariffs as high as 50%.
2. Reciprocal Tariffs: Washington will apply a reduced reciprocal tariff rate of 18% on Indian exports.
3. Key Sectors Covered: The reduced 18% tariff will apply to a range of Indian goods, including textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, artisanal products, and certain machinery.
4. Zero Tariffs on Select Goods (Upon Final Agreement): Subject to the successful conclusion of the interim agreement, tariffs will be eliminated on a wide range of Indian goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
5. India's Commitments: India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of American food and agricultural products. These include dried distillers' grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
6. Purchase Agreement: India intends to purchase $500 billion of U.S. goods over the next 5 years. These goods include energy products, aircraft and aircraft parts, precious metals, technology products such as Graphics Processing Units (GPUs), and coking coal.
7. Broader Bilateral Trade Agreement (BTA): This interim framework is a stepping stone towards a full Bilateral Trade Agreement. The BTA negotiations, launched in February 2025, aim to include additional market access commitments and support more resilient supply chains.
8. Defense Cooperation: India has also committed to a framework with the U.S. to expand defense cooperation over the next 10 years.
9. Removal of National Security Tariffs: The U.S. will remove certain Section 232 tariffs on Indian aircraft and aircraft parts.
10. Commitment to Market Access: Both countries committed to providing each other with preferential market access in sectors of mutual interest on a sustained basis.

This interim agreement reflects a commitment to safeguarding farmers' interests, sustaining rural livelihoods, and deepening economic cooperation between the two countries. It seeks to eliminate financial hurdles that have constrained bilateral trade. The deal aims to promote reciprocal and balanced trade based on mutual interests and concrete outcomes.