US and India Accelerate Interim Trade Deal to Unlock Broader Bilateral Agreement

The United States and India will work in the coming weeks to finalise an interim trade agreement as a step toward a broader Bilateral Trade Agreement (BTA), the White House said in a fact sheet released on Monday.

The two countries will continue negotiations on unresolved issues such as services and investment, labour standards, government procurement, intellectual property, and non-tariff barriers. The fact sheet follows a recent joint statement by both governments outlining a framework for reciprocal and mutually beneficial trade.

According to the White House document titled “The United States and India Announce Historic Trade Deal (Interim Agreement)”, India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of American agricultural and food products. These include dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruits, certain pulses, soybean oil, wine, spirits, and other products. India has also committed to significantly increasing purchases of US energy, information and communication technology, agricultural goods, coal, and other products, with total purchases expected to exceed $500 billion.

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The fact sheet said US President Donald Trump is advancing market access for American exporters while reducing tariff and non-tariff barriers to protect US economic and national security interests. It noted that India has among the highest tariffs imposed on the United States, averaging around 37 per cent on agricultural goods and exceeding 100 per cent on certain automobile imports, alongside restrictive non-tariff barriers.

The United States and India will also negotiate rules of origin to ensure that benefits under the agreement primarily accrue to both countries. India has committed to removing its digital services tax and to negotiating comprehensive digital trade rules, including provisions prohibiting customs duties on electronic transmissions.

The White House added that both countries have agreed to strengthen economic security cooperation to enhance supply chain resilience, address non-market practices of third parties, and expand collaboration on investment screening, export controls, and technology. The move follows a recent call between President Donald Trump and Prime Minister Narendra Modi, during which both leaders reaffirmed their commitment to concluding a full Bilateral Trade Agreement.

As part of the understanding, the United States has lowered its reciprocal tariff on Indian imports from 25 per cent to 18 per cent and removed an additional 25 per cent tariff after India committed to stopping purchases of Russian oil.

Also Read: US Formalizes Trade Peace: Additional 25% Duties on Indian Goods Terminated