India-US trade deal: Reduced tariffs, preferential market access, purchase commitments — Here's 10 key terms agreed upon

India-US trade deal: India and the United States on 6 February announced an interim trade framework agreement, with commitment from both countries to broaden trade, and reduction in the US reciprocal tariffs to 18% from earlier 50%.

A joint statement issued by India and the US said the interim agreement “will represent a historic milestone in our countries' partnership, demonstrating a common commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes”.

Notably, this comes almost a year after US President Donald Trump and Prime Minister Narendra Modi began negotiations on the broader US-India Bilateral Trade Agreement (BTA) on 13 February 2025.

Scope of the India-US interim trade agreement — 10 Key highlights

• Under the framework, India will eliminate or reduce tariffs on all US industrial goods and a broad set of agricultural and food products.
• This will include items such as dried distillers' grains (DDGs), fresh and processed fruit, red sorghum for animal feed, soybean oil, tree nuts, wine and spirits, and other additional products.
• Further, additional market access commitments and support for more resilient supply chains is also part of the interim deal.
• On its part, the US will apply a reduced reciprocal tariff rate of 18% on Indian exports, with scope for further reductions as negotiations move forward.
• Items with reduced 18% tariffs include: artisanal products, certain machinery, home decor, leather and footwear, organic chemicals, plastic and rubber, and textiles and apparel.

• Further, the US will also remove reciprocal tariffs on goods including aircraft parts, gems and diamonds, and generic pharmaceuticals.
• Both countries have committed to “provide each other preferential market access in sectors of respective interest on a sustained basis”.
• Both countries will establish rules of origin that ensure that the benefits of the Agreement accrue predominately to India and the US.
• As per the joint statement, India also intends to purchase $500 billion of US products over the next 5 years, including: aircraft and aircraft parts, coking coal, energy products, precious metals, and technology products.
• On its part, the US will significantly increase trade in technology products, including Graphics Processing Units (GPUs) and other goods used in data centers, and expand joint technology cooperation.

US-India trade deal: Non-tariff barriers to be addressed

The joint statement further said that India and the US will also “address non-tariff barriers that affect bilateral trade”. It stated:

• India agrees to address long-standing barriers to the trade in US medical devices;
• Eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, US Information and Communication Technology (ICT) goods; and
• Determine, with a view towards a positive outcome, within six months of entry into force of the Agreement whether US-developed or international standards, including testing requirements, are acceptable for the purposes of US exports entering the Indian market in identified sectors.
• Recognizing the importance of working together to resolve long-standing concerns, India also agrees to address long-standing non-tariff barriers to the trade in US food and agricultural products.

“The United States and India agree to strengthen economic security alignment to enhance supply chain resilience and innovation through complementary actions to address non-market policies of third parties, as well as cooperation on inbound and outbound investment reviews and export controls,” the statement added.