“The successful conclusion of the India-US interim trade agreement framework is another feather in the cap for the Government of India led by the Hon’ble Prime Minister, reflecting their ability to build strong, trusted global business partnerships,” a brief statement from the BSE chief said.
The US and India have on Saturday issued a joint statement that they have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade (interim agreement) and have agreed to a framework.
According to the joint statement, India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
India had reservations about opening the entire US agricultural sector to Indian markets, which is why the interim trade deal apparently missed the initially set timeline – fall of 2025. The Indian side has secured protection for its sensitive sectors, particularly agriculture and dairy, in this deal.
Ishita Mukhopadhyay, Senior Professor, Department of Economics, University of Calcutta, noted that the joint document is still very unclear and non-transparent on the commodities and services included in the BTA.
“US has been trying to increase market access in agricultural sector in India for some years…Market access in agriculture can push away the country’s production away from the market. It has already been doing so anyway,” said Ishita Mukhopadhyay.G. Vijay, Associate Professor, School of Economics, University of Hyderabad asserted that the joint statement seems asymmetrical, with India committing to purchase a definite quantum of value of goods from the US, while US only reduces tariffs to reciprocal rates.
“This seems to be much more on account of geopolitical and security considerations than economic reasons, considering, US is more dependent on Indian imports than, the other way around and it will not be easy for US industry to grapple with the supply chain disruptions,” G Vijay added.
Furthermore, as per the joint statement, both countries decided to address non-tariff barriers affecting bilateral trade. India agrees to address long-standing barriers to trade in US medical devices and to eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, US Information and Communication Technology (ICT) goods.
The joint statement also noted that India intends to purchase USD 500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next 5 years. India and the United States will significantly increase trade in technology products, including Graphics Processing Units (GPUs) and other goods used in data centres, and expand joint technology cooperation.
On February 2, a phone call between Prime Minister Narendra Modi and US President Donald Trump led to the announcement of the conclusion of negotiations on the much-awaited trade deal.
The Trump administration had imposed tariffs on major exporters to the US, including India and China. There has been a 50 per cent tariff on goods from India entering the United States since August 2025. The tariffs have now been reduced to 18 per cent following the leaders’ recent phone call.
The BTA, formally proposed in February 2025, seeks to more than double bilateral trade, from the current USD 191 billion to USD 500 billion by 2030.
