India, US announce framework for interim trade deal

The joint statement came a week after US President Donald Trump announced plans to cut import duties on Indian products, following months of trade tensions between the two countries. Last year, the US imposed high tariffs on India to pressure New Delhi to reduce its dependence on discounted Russian crude oil.

Under the proposed agreement, tariffs on Indian goods entering the US market would be reduced to 18 percent from the current 25 percent. Trump said the decision followed Indian Prime Minister Narendra Modi’s commitment to stop purchasing Russian oil.

Both countries described the framework as “reciprocal and mutually beneficial” and said they would continue working toward a broader trade agreement. The future deal is expected to include wider market access and measures to strengthen supply chains.

As part of the interim arrangement, India agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of American agricultural and food products, according to the statement.

Trump earlier said India would gradually bring down import taxes on US goods to zero and purchase up to $500 billion worth of American products. On Friday, he also signed an executive order revoking a separate 25 percent tariff imposed on Indian goods last year.

However, Indian opposition parties criticized the deal, warning it could hurt sensitive sectors such as agriculture and dairy, which provide livelihoods for millions of people.

Responding to the concerns, Indian Trade Minister Piyush Goyal said the agreement protects key agricultural and dairy products, including maize, wheat, rice, ethanol, tobacco and certain vegetables.

“This agreement will open a $30 trillion market for Indian exporters,” Goyal said in a social media post, referring to the size of the US economy. He added that the deal could create hundreds of thousands of new jobs.

Goyal also said tariffs would be reduced to zero on several Indian exports to the US, including generic medicines, gems and diamonds, and aircraft parts.

India has recently expanded its trade ties globally, including a free trade agreement with the European Union and new trade deals with Oman and New Zealand, reports UNB.