US and India unveil interim trade framework, move closer to broad pact | World News

The United States and India said on Friday they had agreed on an interim trade framework that lowers tariffs, changes energy trade and sets the stage for a broader bilateral agreement, moving the two countries closer to ending years of trade friction, Reuters reported.In a joint statement, Washington and New Delhi said the framework confirmed their commitment to negotiating a full trade pact, while noting that more talks were needed before a final deal could be signed.

US President Donald Trump announced earlier this week that the two sides had reached a preliminary deal under which US tariffs on Indian goods would be cut sharply in return for changes in India’s energy purchases and trade barriers.

What the interim deal says

Under the framework, US tariffs on most Indian imports will fall to 18% from 50%. Half of the earlier 50% rate had been imposed Trump as a penalty for India’s purchases of Russian oil, which he said were helping fund Russia’s war in Ukraine.

On Friday, Trump signed an executive order cancelling that 25% penalty after India agreed to stop buying Russian oil and shift energy purchases to the United States and Venezuela, according to the statement.The two governments said negotiations would continue toward a full trade agreement, which Indian officials expect to finalise in March.Story continues below this ad

India to buy more US goods

The framework sets out new details not included in Trump’s initial announcement. It says India will buy $500 billion worth of US goods over five years.

These purchases will include oil, gas, coking coal, aircraft and aircraft parts, precious metals and technology products. The technology category includes graphics processing units, widely used in artificial intelligence systems, as well as equipment for data centres.

India also agreed to eliminate or cut tariffs on all US industrial goods and on a wide range of US agricultural and food products. These include animal feed such as dried dillers’ grains and red sorghum, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.

What the US keeps in place

While tariffs will fall, the United States will keep an 18% tariff on most imports from India. These include textiles and clothing, leather and footwear, plastics and rubber products, organic chemicals, home décor items, handicrafts and some machinery.Story continues below this ad

India will receive the same tariff treatment as other US allies on certain aircraft and aircraft parts. It will also get a quota for auto parts that can be imported at a lower tariff rate.On pharmaceuticals, the statement said India would receive “negotiated outcomes” on generic drugs and ingredients, depending on the results of a separate US tariff investigation into the sector.

India welcomed framework

Indian Trade Miner Piyush Goyal welcomed the framework, saying it opened up access to the US market, which he described as worth $30 trillion in annual economic output.

In a post on X, Goyal said the deal would benefit Indian exporters, particularly farmers, fishermen and small and medium-sized businesses. He said on Thursday that both sides were working towards signing a full trade agreement in March, after which India’s tariff cuts on US goods would take effect.

Standards and wider cooperation

India also agreed to address long-standing non-tariff barriers affecting imports of farm goods, medical devices and communications equipment. Talks are due to conclude within six months on accepting US or international safety and licensing standards for these products.Story continues below this ad

The United States said it would consider India’s requests for lower tariffs during further negotiations. Both sides also agreed to cooperate on export controls for sensitive technologies and to address “non-market policies of third parties”, a reference to China.

The two countries have struggled for years to finalise a full trade deal, with disputes over agriculture, digital trade and market access. Officials say strategic concerns, including competition with China, supply chain shifts and energy security, have now given talks fresh momentum.