The United States and India have unveiled a framework for an interim trade agreement, easing months of tension and clearing the way toward a broader bilateral trade pact.
The announcement follows President Donald Trump’s recent trade deal declaration and moves to reset strained economic ties over India’s previous purchases of Russian oil.
Under the framework, India has agreed to eliminate or significantly reduce tariffs on U.S. industrial and agricultural goods, while the United States will apply an 18 % reciprocal tariff on most Indian exports, down from punitive rates previously as high as 50 %. A 25 % penalty duty tied to India’s oil purchases from Russia has also been rescinded as part of the agreement.
New Delhi plans to purchase roughly $500 billion worth of U.S. products over the next five years, including energy, aircraft, technology goods, and precious metals, bolstering trade and supply chain cooperation.
The deal also touches on vehicle tariffs, with reduced duties on high-end internal combustion vehicles and exemptions on certain motorcycles.
Indian Prime Minister Narendra Modi hailed the framework as a step toward deeper partnership, while critics argue the arrangement may favor U.S. economic interests.
Both sides aim to finalize a formal trade agreement by March 2026, building on this interim framework.
