The Donald Trump administration has described the new India-United States trade arrangement as a “historic” move that, according to the White House, will open India’s 1.4 billion-strong market to American goods. In a statement outlining the deal’s key elements, Washington said it has agreed to reduce the reciprocal tariff on India from 25% to 18%.
The statement also clarified President Trump’s assertion that India would cut “tariffs and non-tariff barriers against the United States to ZERO.” Officials indicated this reflects an in-principle commitment by New Delhi to lower or phase out duties on select US products, rather than an immediate elimination of all tariffs. The language had earlier triggered concern among Indian traders.
The White House said the US will remove an additional 25% tariff on Indian imports in recognition of India’s commitment to stop buying Russian oil.
Under the agreement, India has agreed to eliminate or reduce tariffs on all US industrial goods and a broad range of food and agricultural products. These include dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruit, certain pulses, soybean oil, wine and spirits, among others.
India has also committed to increasing purchases of American goods, including more than $500 billion worth of US energy, information and communication technology products, agricultural coal and other items.
New Delhi will address priority non-tariff barriers affecting bilateral trade, remove its digital services tax, and negotiate digital trade rules to curb discriminatory practices. These rules will also prohibit customs duties on electronic transmissions.
Both sides have agreed to negotiate rules of origin to ensure the benefits primarily accrue to the two countries. The statement added that Washington and New Delhi will deepen economic security cooperation to strengthen supply chains, coordinate on investment screening and export controls, and expand collaboration in technology and innovation.
