US, India Reach Framework for Interim Trade Deal

The United States and India announced that they have agreed on a framework for an interim trade agreement, reaffirming their commitment to negotiating a broader bilateral trade pact in the coming months.

In a joint statement, the two governments said they would “immediately begin implementing the framework” and work toward finalizing the temporary arrangement, with the aim of reaching a comprehensive and mutually satisfactory trade agreement in line with an agreed roadmap.

The interim deal follows an announcement earlier this week by U.S. President Donald Trump that Washington would reduce tariffs on Indian goods from 50% to 18%, in exchange for India halting purchases of Russian oil and lowering trade barriers.

A formal trade agreement between Washington and New Delhi is expected to be signed in March, after which India will begin cutting tariffs on U.S. goods, according to Indian Commerce Minister Piyush Goyal.

Trump revealed details of the accord on social media following a phone call with Indian Prime Minister Narendra Modi, stating that India would shift its energy purchases toward the United States and potentially Venezuela.

On Friday, Trump also signed an executive order rescinding punitive 25% tariffs previously imposed on all Indian imports in response to New Delhi’s purchases of Russian crude.

Under the framework agreement, India is set to purchase an estimated $500 billion worth of U.S. goods over the next five years. The planned imports include: energy products, aircraft and aviation components, precious metals, technology products, and metallurgical coke.

India has also agreed to eliminate or reduce tariffs on all U.S. industrial goods and a broad range of American agricultural and food products.

Additionally, New Delhi will scrap restrictive import licensing requirements that have delayed or capped shipments of U.S. information and communications technology (ICT) goods.

For its part, the United States will remove tariffs on certain aircraft and aircraft parts, while applying a reciprocal tariff rate of 18% under the new structure.

The framework signals a significant reset in U.S.-India trade relations, aligning economic cooperation with broader geopolitical and supply chain considerations.