Outlook Business Desk
India and the United States have finalised an interim trade framework, marking a historic milestone. The agreement lowers tariffs, strengthens bilateral trade and sets the stage for $500bn in five-year transactions.
One of the major highlights of the interim framework is the sharp cut in US tariffs on Indian goods, brought down from 50% to a final 18%. India will also remove or reduce tariffs on American industrial, agricultural and food products.
Under the framework, the US will end reciprocal tariffs on Indian exports such as medicines, gemstones, diamonds and aircraft parts, easing market access and supporting smoother trade flows between both countries.
India and the United States will work to resolve non-tariff barriers impacting medical devices, agricultural goods and Information and Communication Technology products, aiming to improve trade efficiency and speed up market access for key exports.
India has also agreed to purchase $500bn worth of US energy products, aircraft, metals, coal and technology products over the next five years, boosting bilateral trade volumes.
India will remove restrictive import licensing requirements for US medical devices and assess international standards to ease entry, helping American manufacturers gain faster access to the Indian market while ensuring regulatory compliance.
Additionally, both countries will promote digital trade and expand technology cooperation, including high-demand products such as Graphics Processing Units (GPUs) for data centres, while working to address discriminatory practices in the sector.
Meanwhile, India will review long-standing non-tariff barriers on US food and agricultural products, aiming to ease trade restrictions, improve trade flows and expand market access for American exporters.
The framework allows flexibility if tariffs change, with India and the US continuing talks to widen market access under a Bilateral Trade Agreement (BTA), including a review of existing US tariffs on Indian exports.