New Delhi: India and the US have reached a framework for an interim agreement regarding reciprocal and mutually beneficial trade, which will include additional market access commitments and support more resilient supply chains. As part of the pact, the US will also tariffs on certain aircraft and aircraft parts of India imposed to eliminate threats to national security found in Proclamation 9704 of March 8, 2018.
Similarly, consistent with US national security requirements, India will receive a preferential tariff rate quota for automotive parts subject to the tariff imposed to eliminate threats to national security found in Proclamation 9888 of May 17, 2019. “Contingent on the findings of the US Section 232 investigation of pharmaceuticals and pharmaceutical ingredients, India will receive negotiated outcomes with respect to generic pharmaceuticals and ingredients,” according to a joint statement.
Also, 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. The US will now apply a reciprocal tariff rate of 18 per cent under Executive Order 14257 of April 2, 2025, on 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 the Interim Agreement, it will remove the reciprocal tariff on a wide range of goods identified in the Potential Tariff Adjustments for Aligned Partners Annex to Executive Order 14346 of September 5, 2025, including generic pharmaceuticals, gems and diamonds, and aircraft parts,” according to the statement. The statement further stated that the US and India commit to provide each other preferential market access in sectors of respective interest on a sustained basis.
Recognising the importance of working together to resolve long-standing concerns, India also agrees to address long-standing non-tariff barriers to the trade in U.S. food and agricultural products. India intends to purchase $500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next 5 years.
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