Tariff Reduction and Trade Commitments Announced
The United States and India on Saturday announced that they have reached a framework for an interim trade agreement, under which America will reduce tariffs on Indian goods to 18 per cent. The development was confirmed through a joint statement issued by the White House.Framework Linked to Ongoing Bilateral Trade Talks
According to the statement, the framework reaffirms the commitment of both countries to the broader US India Bilateral Trade Agreement negotiations. These talks were launched by US President Donald J Trump and Indian Prime Minister Narendra Modi on February 13, 2025.The framework also includes provisions for additional market access commitments and aims to support more resilient supply chains between the two economies.
Interim Agreement Described as Historic Milestone
Describing the significance of the move, the joint statement said the interim agreement would represent a historic milestone in the partnership between the United States and India. It added that the framework demonstrates a shared commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes.Market Access and Tariff Changes Outlined
Under the proposed terms, India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products. These include dried distillers grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, along with additional products.On the other side, the United States will apply a reciprocal tariff rate of 18 per cent on originating Indian goods. These include textile and apparel products, leather and footwear, plastic and rubber items, organic chemicals, home decor, artisanal products, and certain categories of machinery.
Possible Tariff Removal on Key Indian Exports
Subject to the successful conclusion of the interim agreement, the United States will remove reciprocal tariffs on a wide range of Indian goods. These include generic pharmaceuticals, gems and diamonds, and aircraft parts, as outlined in the statement.The framework sets the stage for continued negotiations while signalling progress toward deeper trade integration between the two countries.
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