India and U.S. Agree on Interim Trade Framework to Boost Bilateral Commerce

The Ministry of Commerce and Industry recently shared a press release regarding the United States and India’s Interim Agreement for mutually beneficial trade.

The United States and India have agreed on a plan for an Interim Agreement regarding reciprocal and mutually beneficial trade (Interim Agreement) that will help both countries do business with each other more easily and fairly.

Today’s framework shows that the U.S. and India are still committed to working toward a bigger trade agreement that was launched in February 2025 by President Donald J. Trump and Prime Minister Narendra Modi. This agreement aims to open markets more, make trade fair for both sides, and strengthen supply chains.

The interim agreement is an important step in their relationship. It shows that both countries want fair, balanced trade that benefits each other and leads to real results.

The Interim Agreement between the United States and India contains the following key terms:

1. India has agreed to lower or remove taxes on many products imported from the United States, which will make these goods cheaper and easier to buy in India. This includes industrial products, animal feed like DDGs and red sorghum, food items such as nuts, fresh and processed fruits, soybean oil, and drinks like wine and spirits.

2. The United States will charge an 18% tariff on many products coming from India, such as clothes, shoes, plastic items, chemicals, home decor, handmade goods, and some machinery. This is meant to respond to trade problems between the two countries. However, if India and the U.S. successfully complete a temporary trade agreement, the U.S. will remove this tax on many other products, including generic medicines, gems and diamonds, and aircraft parts.

3. The United States will stop charging extra taxes (tariffs) on some aeroplanes and aeroplane parts from India. These taxes were added earlier because the U.S. said they were needed for national security reasons. Now, those extra charges will be removed.

4. The United States and India agree to give each other special trade benefits in important sectors over the long term.

5. The United States and India will make rules to make sure that mostly the U.S. and India benefit from this agreement.

For more information, refer to the official press release-