The U.S. is dropping some tariffs on imports from India immediately and has pledged to lower others if the two sides successfully conclude a trade agreement.
The U.S. and India announced Feb. 6 the conclusion of a framework for an interim trade agreement that represents a step toward a broader bilateral deal that the White House said “will include additional market access commitments and support more resilient supply chains.” A joint statement said officials will “promptly implement” this framework and work toward finalizing the interim agreement.
In a related move, President Trump issued an executive order lifting the additional 25 percent tariff he had imposed on imports from India due to its continued purchases of Russian oil and oil products. This change was effective with respect to goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EST on Feb. 7. The EO explains that this tariff is being removed because India has committed to stop direct and indirect imports of Russian oil, has represented that it will purchase U.S. energy products, and has pledged to expand bilateral defense cooperation over the next 10 years.
According to the joint statement, key terms of the interim agreement will include the following.
Tariffs
- The U.S. will lower its “reciprocal” tariff rate from 25 percent to 18 percent for originating goods of India, including textile and apparel, leather and footwear, plastic and rubber, organic chemicals, home décor, artisanal products, and certain machinery.
- Subject to the successful conclusion of an interim agreement, the U.S. will remove its reciprocal tariff on a wide range of goods identified in the Potential Tariff Adjustments for Aligned Partners Annex to Executive Order 14346 of Sept. 5, 2025, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
- The U.S. will exempt certain aircraft and aircraft parts of India from Section 232 tariffs on steel, aluminum, and copper.
- India will receive a preferential tariff-rate quota for automotive parts subject to the Section 232 tariff on such goods.
- Contingent on the findings of an ongoing Section 232 investigation, India will receive negotiated outcomes with respect to generic pharmaceuticals and ingredients.
- India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
Other
- The two sides will establish rules of origin that ensure that the benefits of the agreement accrue predominantly to the U.S. and India.
- India has agreed to address longstanding barriers to trade in U.S. medical devices; eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, U.S. information and communication technology goods; and determine within six months (with a view toward a positive outcome) whether U.S.-developed or international standards, including testing requirements, are acceptable for the purposes of U.S. exports entering the Indian market in identified sectors.
- The U.S. and India will work toward further expanding market access opportunities through the negotiation of a bilateral trade agreement, during which the U.S. intends to take into consideration India’s request that it continue to work to lower tariffs on Indian goods.
- The two sides intend to take complementary actions to address non-market policies of third parties and to cooperate on inbound and outbound investment reviews and export controls.
- Two-way trade in technology products, including graphics processing units and other goods used in data centers, will be significantly expanded.
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