Highlights:
- India will reduce or eliminate tariffs on select US industrial and agricultural goods, not all imports.
- The US will cut reciprocal tariffs on Indian goods from 25 per cent to 18 per cent.
- India has committed to purchasing more than $500 billion in US energy, technology, and agricultural products.
- New Delhi will remove its digital services tax and negotiate new digital trade rules.
- Both countries aim to finalize an interim deal as a step toward a broader bilateral trade agreement.
The White House on Monday (9) released a detailed factsheet on the newly announced India-United States trade framework, seeking to clarify president Donald Trump’s assertion that India would cut tariffs on American goods to 'zero,' a claim that sparked concern among Indian exporters and traders.
Describing the agreement as a 'historic' step in bilateral relations, the administration said the deal would significantly expand US access to India’s market of more than 1.4 billion people while strengthening cooperation in technology, energy, and supply chains.
According to the factsheet, the United States has agreed to reduce its reciprocal tariff rate on Indian imports from 25 per cent to 18 per cent. In addition, Washington will remove an extra 25% tariff on Indian goods, citing New Delhi’s commitment to halt purchases of Russian oil.
On the Indian side, the White House said New Delhi has agreed to 'eliminate or reduce tariffs' on all US industrial goods and a broad range of agricultural and food products. These include dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruits, certain pulses, soybean oil, wine, spirits, and other items. Officials emphasized that the reductions would be phased and product-specific, rather than an immediate, across-the-board removal of duties.
The statement also said India has committed to substantially increasing purchases of American goods, including more than $500 billion worth of US energy, information and communication technology products, agricultural commodities, coal, and other materials over time.
Addressing non-tariff barriers, the White House noted that India has agreed to tackle regulatory and procedural obstacles affecting bilateral trade in priority sectors. As part of the framework, New Delhi will remove its digital services taxes and enter negotiations on a robust set of digital trade rules. These talks are expected to cover issues such as prohibiting customs duties on electronic transmissions and addressing discriminatory or burdensome digital practices.
The two countries also agreed to negotiate rules of origin to ensure that trade benefits accrue primarily to the United States and India, rather than third-party economies. The administration added that both sides will deepen cooperation on supply chain resilience, investment screening, export controls, and responses to what it described as “non-market policies” by third countries.
Trump’s original statement that India would reduce “tariffs and non-tariff barriers against the United States to ZERO” was later characterized by officials as an in-principle commitment, signaling intent to lower or phase out duties on selected U.S. products rather than eliminate all tariffs immediately.
The framework follows a recent phone call between Trump and Indian prime minister Narendra Modi, during which the leaders agreed to pursue an interim reciprocal trade agreement. The White House said both governments aim to implement the framework in the coming weeks while continuing negotiations toward a comprehensive US-India Bilateral Trade Agreement covering goods, services, investment, and regulatory issues.
