India–US Trade Deal Receives Big Boost From White House
The White House has released a detailed fact sheet outlining the path forward for the newly announced India–US trade agreement, describing it as a major step toward rebalancing bilateral trade and strengthening long-term economic cooperation between the two countries.
The framework for the interim trade agreement was finalised last week following a telephonic conversation between Prime Minister Narendra Modi and US President Donald Trump. Officials on both sides have termed the understanding historic, with implementation work expected to begin in the coming weeks.
How the Interim Trade Framework Was Reached?
The agreement follows renewed engagement between New Delhi and Washington aimed at resolving long-standing trade concerns.
- The framework was agreed after direct talks between the two leaders
- It serves as a stepping stone toward a broader Bilateral Trade Agreement (BTA)
- Both sides plan to move quickly on implementation and negotiations
Benefits for Indian Exports
Under the proposed arrangement, India is expected to benefit from reduced US import duties across several export-driven sectors. These reductions are likely to support manufacturing growth and employment. Key Indian exports set to gain include:
- Textiles and garments
- Leather and footwear products
- Plastic and rubber goods
- Organic chemicals
- Home décor and artisanal items
- Select categories of machinery
Market Access for US Goods in India
In return, India has agreed to remove or lower tariffs on a wide range of American industrial and agricultural products, improving access to the Indian market. Products covered include:
- Dried distillers’ grains and red sorghum (animal feed)
- Tree nuts
- Fresh and processed fruits
- Pulses and soybean oil
- Wine and spirits
India has also signalled plans to significantly increase imports from the US across sectors such as energy, information and communication technology, agriculture, coal, and other strategic areas, with purchases expected to cross $500 billion over time
Tariff Rollbacks and Reciprocal Rates
As part of the agreement:
- The US has withdrawn the additional 25% duty on Indian imports
- An executive order formalising the rollback has been signed
- The reciprocal tariff rate will be reduced to 18%
Washington cited India’s willingness to address trade imbalances and align on broader security concerns as key factors behind the move.
Digital Trade and Economic Security
The fact sheet also outlines commitments beyond tariff reductions.
- India will address non-tariff barriers affecting bilateral trade
- Both sides will work on clear rules of origin
- Discussions will advance on digital trade cooperation
- The US claims India will end its digital services taxes
Additionally, both governments have pledged closer coordination on economic security, supply chain resilience, and technology cooperation, with expectations of a rise in two-way trade in technology products.
What Comes Next
Negotiations will continue toward a comprehensive Bilateral Trade Agreement, covering:
- Remaining tariff and non-tariff barriers
- Regulatory practices and trade facilitation
- Services, investment, and intellectual property
- Labour, environment, and government procurement
US officials said the agreement provides a clear and practical roadmap for achieving more balanced and reciprocal trade between India and the United States.
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