'Mutually Beneficial, Historic Milestone': India, US Announce Framework For Trade Deal

Last Updated:February 07, 2026, 07:00 IST

Both countries described the framework as a major step towards balanced and reciprocal trade, with a focus on concrete outcomes and more resilient supply chains.

India and the USA announced on Saturday a framework for an interim agreement “regarding reciprocal and mutually beneficial trade".

A statement by India said the move reaffirmed their commitment to the broader US-India Bilateral Trade Agreement (BTA) negotiations, which will include additional market access and support more resilient supply chains.

“The Interim Agreement between the United States and India will represent a historic milestone in our countries’ partnership, demonstrating a common commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes," the Indian statement said.

The breakthrough after a hard-negotiated trade deal came after a phone call between President Donald Trump and Prime Minister Narendra Modi earlier this week.

Top US trade negotiator Jamieson Greer said, “President Trump’s dealmaking is unlocking one of the largest economies in the world for American workers and producers, lowering tariffs for all US industrial goods and a wide array of agricultural products."

He said the announcement of a framework “demonstrates the deepening ties between the United States and India as we create new opportunities for farmers and entrepreneurs in both countries", and thanked Indian Commerce Minister Piyush Goyal “for his leadership and commitment to achieve fair and balanced trade with the United States".

Goyal stressed the move will open a $30 trillion market for Indian exporters, especially MSMEs, farmers and fishermen. He said in his X post that the increase in exports will create lakhs of new job opportunities for our women and youth.

“As part of this framework, the US will slash reciprocal tariffs on Indian goods to 18%, providing a huge market opportunity in key sectors such as textiles & apparel, leather & footwear, plastic & rubber products, organic chemicals, home décor, artisanal products, and select machinery in the world’s largest economy," he posted.

The Indian statement said the two sides will implement this “framework and work towards finalising the Interim Agreement with a view to concluding a mutually beneficial BTA consistent with the roadmap agreed in the Terms of Reference".

Find out the key terms of the agreement below:

Tariffs And Market Access

India will cut or remove duties on US industrial goods and several agricultural products, including DDGs, red sorghum for animal feed, tree nuts, fruits, soybean oil, wine and spirits.The United States will impose a reciprocal 18% tariff on certain Indian goods such as textiles, leather, footwear, plastics, rubber, organic chemicals, home décor, handicrafts and some machinery.The US plans to remove tariffs on several Indian exports, including generic medicines, gems and diamonds and aircraft parts, once the agreement is concluded.

Sector-Specific Concessions

The US will lift tariffs on certain Indian aircraft and aircraft components imposed under national security provisions.India will receive a preferential tariff quota for automotive parts in the US market.Negotiated outcomes are expected on generic pharmaceutical ingredients depending on a US investigation.

Trade Rules And Barriers

Both sides will provide each other preferential market access in sectors of interest.Rules of origin will ensure benefits mainly go to India and the US.India will address long-standing concerns affecting US medical devices, ICT goods import procedures and agricultural products.The two countries will discuss standards and certification processes to ease compliance.

Future Commitments

If either country changes tariffs, the other can adjust its commitments.Negotiations will continue to expand market access under the broader BTA.The US will consider India’s request to reduce duties on Indian exports during future talks.

Investment, Supply Chains And Technology

Both sides will align economic security policies and cooperate on investment reviews and export controls.India plans to purchase USD 500 billion worth of US energy, aircraft, precious metals, technology products and coking coal over five years.Trade in technology products, including GPUs and data-centre equipment, will be expanded with greater joint cooperation.

Digital Trade

The countries will work to remove discriminatory practices affecting digital trade and develop mutually beneficial digital trade rules under the BTA.Officials said the framework will be implemented soon, while efforts continue to finalise the interim pact and conclude the comprehensive trade agreement in line with the agreed roadmap.

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