The US and India have unveiled a trade agreement that the White House has called “historic,” designed to broaden market access and strengthen economic ties between the two nations. The framework outlines steps to lower tariffs, reduce trade barriers, and boost bilateral commerce across several key sectors.
According to a White House statement, the deal includes the US lowering its reciprocal tariff on Indian goods from 25% to 18%. In return, India will reduce or remove tariffs on a wide range of American industrial and agricultural products, giving US exporters greater access to India’s vast market.
The White House said that under the agreement, India will “eliminate or reduce tariffs” on various US imports such as dried distillers’ grains, sorghum, tree nuts, fruits, certain pulses, soybean oil, and wine and spirits.
The agreement also involves India committing to increase purchases of US goods worth more than $500 billion across sectors like energy, technology, agriculture, and coal.
Both countries will also work on addressing non-tariff barriers that have hindered trade in priority sectors, and will negotiate rules of origin to ensure that the benefits of the deal primarily support businesses in the US and India.
A key focus of the deal is digital trade. The White House statement said India has agreed to remove its digital services taxes and negotiate new bilateral digital trade rules aimed at reducing discriminatory measures and preventing customs duties on electronic transmissions.
Technology and supply chains
The agreement places strong emphasis on technology and economic security. The US and India plan to deepen cooperation in technology products and enhance supply chain resilience. They also committed to closer coordination on investment reviews and export controls.
According to the White House, the deal is part of a broader effort to address longstanding trade imbalances and remove barriers faced by US exporters. The US has maintained that India imposes relatively high tariffs on certain goods, particularly in agriculture and automobiles.
Trump’s claims and what comes next
US President Donald Trump stated that India had agreed to reduce tariff and non-tariff barriers to “zero.” However, officials clarified that the agreement is being implemented in phases and does not involve the immediate removal of all duties. Trump’s comments initially caused concern among some Indian traders.
Over the coming weeks, both countries are expected to put the framework into action and work toward finalizing an interim agreement. Negotiations will continue on unresolved matters such as technical standards, services, investment, and intellectual property, with the goal of reaching a broader, mutually beneficial bilateral trade deal.
