India-US Trade Deal: US Cuts Duty to 18%, India Slashes Tariffs on US Goods, Says Joint Statement

New Delhi: India and the United States on Saturday (February 7) said they have reached a framework for an interim trade agreement under which tariffs on New Delhi will be cut to 18%, according to a joint statement.

Under the framework of the India-US trade deal, India will reduce or remove tariffs on all American industrial goods and a broad range of US agricultural and food products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, among others.

The statement added that if the interim deal is successfully concluded, tariffs would be brought down to zero on several goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts. This would boost India’s export competitiveness and support the Make in India initiative, it mentioned.

Both sides said they would move quickly to implement the framework and work towards finalising the interim agreement, with the aim of concluding a broader bilateral trade agreement (BTA) in line with the agreed roadmap.

Meanwhile, US President Donald Trump has placed India under fresh scrutiny over its crude oil imports with Russia, according to an executive order issued on February 6.  The directive states that India has committed to stop directly or indirectly importing Russian oil and that Washington will establish a monitoring structure to ensure compliance. In August 2025, the US had imposed punitive 25% tariffs on all Indian goods after New Delhi continued purchasing discounted Russian crude imports.

Earlier, Union commerce minister Piyush Goyal had said a “formal agreement” is currently being negotiated and is expected to be signed by mid-March. Commerce secretary Rajesh Agrawal said India would be able to lower tariffs only after the framework is converted into a legal agreement. The creation of US monitoring committee which will directly oversee India’s energy sourcing decisions, raises unprecedented concerns about India’s sovereignty.

“Once the joint statement is there, that … needs to be converted into a legal agreement” in order for India to be able to lower its tariffs, as it implements a most-favoured nation tariff as opposed the US's executive levy, Agrawal told reporters at the signing ceremony for the India-Gulf Cooperation Council free trade deal's terms of reference.

Goyal had said the interim deal represents the first tranche of the broader India-US free trade agreement. Further, he underlined that negotiations for which began about a year ago. Responding to Trump’s claim that India had committed to buying $500 billion worth of American goods, Goyal had suggested such purchases could be spread over five years.

Referring to India’s needs in areas such as energy, data centre equipment and information and communication technology products, he said, “when we estimated what we will need from the USA, we came to a figure of at least $500 billion – we can clearly see before our eyes, as potential that we can procure from the United States of America over the next five years”.

He also pointed to aviation orders, saying, “Our aircraft demand alone – orders placed on Boeing and yet to be placed but ready – are nearly $70-80 billion. If you add the engines and other spare parts it will probably cross $100 billion. Just aircrafts alone.”

Trump had announced the deal earlier this week, saying India would “move forward to reduce their Tariffs and Non Tariff Barriers against the United States to ZERO” as part of the pact.

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