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India and the United States have unveiled an interim trade framework that reduces US reciprocal tariffs on Indian exports to 18 %. It is a major step toward easing trade barriers ahead of a comprehensive Bilateral Trade Agreement (BTA). The framework was announced on February 6 after months of negotiations between the two countries.
The announcement follows earlier confirmations by US President Donald Trump and Prime Minister Narendra Modi. While the detailed BTA is still under discussion, both sides have committed to expanding trade ties, improving market access, and building more resilient supply chains.
Under the interim agreement, India will eliminate or reduce reciprocal tariffs on all US industrial products and a wide range of agricultural and food items. These include dried distillers’ grains, red sorghum used for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine, spirits, and several other products. These concessions are aimed at opening the Indian market further to US exporters while balancing trade interests between the two economies.
In return, Washington will apply a reduced reciprocal tariff rate of 18% to Indian-origin goods. This rate represents a substantial cut from last year’s combined duties, which had reached as high as 50 %. The US has also left room for additional tariff reductions as negotiations progress toward the final BTA.
The reduced Trump tariffs will apply to many key Indian export categories. These include textiles and apparel, leather and footwear, plastics and rubber products, organic chemicals, home décor items, artisanal goods, and selected machinery segments. These sectors are expected to be among the biggest beneficiaries of the interim trade deal.
Subject to the successful conclusion of the interim agreement, the US plans to remove reciprocal tariffs on a wider range of goods. This includes generic pharmaceuticals, gems and diamonds, and aircraft parts. India will also receive preferential tariff-rate quotas for automotive parts. Meanwhile, pharmaceutical outcomes will depend on findings under the US Section 232 investigation.
With the tariff cut, India now ranks among the lowest-tariffed US trading partners in Asia, second only to Japan. The 18 % reciprocal rate is lower than those imposed on several BRICS economies, including China, Brazil, and South Africa. Also, it compares favourably with regional peers such as Pakistan and Bangladesh.
Lower duties improve price competitiveness for Indian goods. They would cut down uncertainty for businesses and strengthen supply-chain cooperation. If negotiations stay on track, a comprehensive BTA that delivers deeper market access, more predictable trade rules, and long-term stability for countries on both sides.
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