India and the United States have taken a major step towards strengthening their bilateral trade ties, with both sides agreeing on an Interim Trade Agreement that will significantly lower tariffs, ease non-tariff barriers, and expand cooperation across key sectors.
Under the proposed arrangement, India will reduce or eliminate customs duties on all US industrial products and on a wide range of American agricultural and food items. These include dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine, spirits and several other products.
If you enjoyed reading this article, you can help support our journalism by adding OHeraldo as a preferred source.
On its part, the United States will impose an 18 per cent tariff on select Indian exports such as textiles and apparel, leather and footwear, plastic and rubber goods, organic chemicals, home décor items, artisanal products and certain categories of machinery. However, once the Interim Agreement is fully finalised, Washington is expected to remove reciprocal tariffs on several important Indian exports, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
In a separate move, the US will also scrap duties on specific aircraft and aircraft components imported from India, providing a boost to India’s growing aerospace manufacturing sector.
Both nations have committed to addressing non-tariff barriers that often slow down or complicate cross-border trade. India will resolve long-pending regulatory issues affecting US medical devices, allowing smoother entry of these products into the domestic market. It will also abolish restrictive import licensing requirements for US information and communication technology (ICT) goods that currently delay approvals or limit quantities.
Additionally, India will work towards removing non-tariff obstacles affecting American agricultural and food products, improving access for these items in the Indian market.
As part of the broader understanding, India has expressed its intention to purchase goods worth around USD 500 billion from the US over the next five years. These purchases are expected to span sectors such as energy, aircraft and components, precious metals, technology products and coking coal.
The two countries also plan to expand trade in advanced technology products, including Graphics Processing Units (GPUs) used in data centres, while enhancing collaboration in emerging and critical technologies.
Meanwhile, negotiations will continue on a comprehensive Bilateral Trade Agreement (BTA) aimed at further opening markets and deepening economic engagement. During these talks, the US will consider India’s request for additional tariff reductions on Indian exports.
The developments mark a significant push by both nations to deepen economic cooperation and unlock new opportunities for businesses and consumers on both sides.
(This story is published from a syndicated feed)
