India-US trade deal: PM Modi says interim agreement will ‘open new opportunities for farmers, entrepreneurs, MSMEs…’

India-US trade deal: Prime Minister Narendra Modi has praised India and the United States' interim agreement as “great news”, adding that the deal will open new opportunities for farmers, entrepreneurs, MSMEs, startup innovators and youth seeking employment.

In a post on social media platform X (formerly known as Twitter), Modi on 7 February quoted the announcement from Union Commerce Minister Piyush Goyal and thanked US President Donald Trump “for his personal commitment to robust ties between our countries”.

Notably, Goyal in his post also said he expects the deal to “open a $30 trillion market for Indian exporters, especially MSMEs, farmers and fishermen” and create “lakhs of new job opportunities for our women and youth”.

‘Framework reflects the growing depth, trust and dynamism’

He wrote on X: “Great news for India and USA! We have agreed on a framework for an Interim Trade Agreement between our two great nations. I thank President Trump for his personal commitment to robust ties between our countries.”

Outlining the significance of the agreement, Modi added that this framework “reflects the growing depth, trust and dynamism of our partnership”.

“It strengthens ‘Make in India’ by opening new opportunities for India’s hardworking farmers, entrepreneurs, MSMEs, startup innovators, fishermen and more. It will generate large-scale employment for women and youngsters,” he added.

Further, the prime minister also noted that India and the US “share a commitment to promoting innovation and this framework will further deepen investment and technology partnerships between us”.

“This framework will also strengthen resilient and trusted supply chains and contribute to global growth. As India moves forward towards building a Viksit Bharat, we remain committed to building global partnerships that are future-oriented, empower our people and contribute to shared prosperity,” he added.

India-US trade deal: What are the key terms?

India and the US on 6 February jointly announced an interim trade framework ahead of their Bilateral Trade Agreement (BTA), with commitment from both sides to broaden trade and reduction in the US reciprocal tariffs to 18%.

• 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.