The United States and India moved closer to a comprehensive trade agreement on Friday after unveiling an interim framework aimed at lowering tariffs, reshaping energy ties and expanding economic cooperation as both countries seek to realign global supply chains.
In a joint statement, the two governments said the framework reaffirmed their commitment to continued negotiations toward a broader bilateral trade pact, while acknowledging that further talks are required to finalize a full agreement.
Trump Lifts Additional Tariff Linked to Russian Oil
Separately, US President Donald Trump signed an executive order removing an additional 25 percent tariff that had been imposed on Indian goods over New Delhi’s purchases of Russian oil.
The order said India had committed to stopping direct or indirect imports of Russian oil. US officials will continue to monitor India’s energy purchases and could recommend reinstating the tariff if oil imports from Russia resume.
The joint US–India statement did not reference Russian oil purchases or confirm a formal pledge by India. Earlier this week, Trump announced that US tariffs on Indian goods would be reduced to 18 percent from 50 percent in exchange for India halting Russian oil purchases and easing trade barriers.
Agriculture Remains a Sensitive Issue
Half of the original 50 percent tariff had been imposed as a penalty for India’s Russian oil imports, which Trump said were supporting Moscow’s war effort in Ukraine. That portion was rescinded after India agreed to shift oil purchases toward the US and Venezuela.
However, India resisted US pressure to broadly open its agricultural market. Trade Minister Piyush Goyal said the framework protects farmers and rural livelihoods by fully safeguarding sensitive agricultural and dairy products.
He added that genetically modified agricultural imports would not be directly permitted under the agreement, while certain fruits, such as apples, would be allowed under a tariff quota system.
Goyal declined to comment on Russian oil, saying the matter would be addressed by India’s foreign ministry.
Political Reactions at Home
India’s opposition Congress party criticized the agreement, arguing that it was concluded largely on US terms and harmed farmers and small traders. The party described the framework as a “complete surrender” of national interests.
Details on Tariff Cuts and Market Access
The joint statement provided more clarity than initial outlines released earlier in the week. It confirmed that India would purchase $500 billion worth of US goods over five years, including oil, gas, coking coal, aircraft and parts, precious metals and technology products.
Technology purchases would include graphics processing units used for artificial intelligence applications, as well as equipment for data centers.
India also agreed to eliminate or reduce tariffs on all US industrial goods and a broad range of food and agricultural products, including animal feed grains, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.
US to Maintain 18 Percent Tariff
Despite the concessions, most Indian exports to the US will still face an 18 percent tariff. Affected sectors include textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, artisanal products and some machinery.
India will receive tariff relief similar to that granted to other US allies for certain aircraft and aircraft parts, along with a quota for auto parts imports subject to a lower tariff rate.
The statement also said India would receive negotiated outcomes on generic pharmaceuticals and ingredients, depending on the results of an ongoing US tariff investigation into the sector.
Accepting Standards and Strategic Cooperation
India agreed to address long-standing non-tariff barriers affecting agricultural products, medical devices and communications equipment. Negotiations are expected to conclude within six months on accepting US or international safety and licensing standards for imports.
The US said it would consider India’s requests for lower tariffs during further negotiations. Both sides also agreed to cooperate on export controls for sensitive technologies and to counter what they described as non-market policies by third countries, a reference to China.
Strategic Urgency Drives Talks
The US and India have struggled for years to finalize a full trade deal due to disputes over agriculture, digital trade, medical devices and market access. Officials from both countries say strategic considerations — including competition with China, supply-chain diversification and energy security — have added fresh urgency to the negotiations.