India US Temporary Trade Agreement: Indian Delegation to Visit Washington to Finalize Legal Text

A team of Indian officials will travel to the United States next week to finalize the legal framework of the proposed temporary trade agreement between the two countries. Commerce Secretary Rajesh Agrawal said on Monday that the visit is expected to begin on February 23, with both sides working toward signing the pact in March.

Legal Drafting Underway for Interim Trade Deal​

Earlier this month, India and the US issued a joint statement confirming that a framework for the temporary trade agreement had been finalized. The next step involves translating that framework into a legally binding document.

“The joint statement lays out the details of the agreement. Now, these details need to be translated into a legal agreement, which will be signed between the two sides,” Agrawal told reporters.

Virtual discussions are currently underway to iron out the legal aspects. India’s chief negotiator Darpan Jain, Joint Secretary in the Commerce Ministry, will lead the delegation to Washington to continue these talks.

Agrawal said the objective is to conclude and sign the agreement in March, although no formal deadline has been fixed due to the complexities involved in finalizing the legal text.

Reciprocal Tariff Reduction and Duty Concessions​

Under the temporary trade pact, both countries will extend duty concessions on a range of goods traded between them.

The US has announced plans to reduce reciprocal tariffs on Indian goods from 25 percent to 18 percent. It has already removed the 25 percent punitive tariffs that were imposed on India for purchasing Russian crude oil.

Agrawal said the US is in the process of implementing the tariff reduction from 25 percent to 18 percent.

“I am told they are processing it. It should be done quickly,” he said, adding that the expectation is for it to be completed this week. If not, the Indian delegation will pursue the matter during their visit.

He further explained that the 18 percent tariff level will be formalized under the temporary pact. Any additional tariff reductions, including cases where reciprocal tariffs may eventually be brought down to zero, will take effect only after the legal agreement is signed.

Similarly, India will extend any tariff reductions or preferential market access to the US only after the legal agreement is concluded.

Cotton Trade Between India and the US​

On cotton trade, Agrawal stated that India imports approximately 200 to 250 million dollars worth of US cotton annually.

He indicated that the variety being imported is likely the same variety for which India receives preferential market access under existing arrangements.

With legal negotiations set to intensify in Washington next week, both sides are aiming to convert the agreed framework into a formal trade pact that could shape bilateral trade flows in the coming months.