USIBC Celebrates US-India Interim Trade Framework as a Landmark Achievement
The US-India Business Council (USIBC) has extended congratulations to the governments of the United States and India for establishing a framework for an Interim Agreement focused on reciprocal and mutually beneficial trade. This development, announced in a joint statement, marks a significant step forward in bilateral economic relations.
Framework Details and Strategic Implications
According to the joint statement, the framework reaffirms both nations' commitment to the broader US-India Bilateral Trade Agreement (BTA) negotiations, which were initiated by President Donald Trump and Prime Minister Narendra Modi on February 13, 2025. The interim agreement is designed to include additional market-access commitments and enhance support for more resilient supply chains, addressing global economic uncertainties.
USIBC emphasized the importance of this agreement, stating, "The Interim Agreement between the United States and India will represent a historic milestone in our countries' partnership, demonstrating a common commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes."
Key Provisions of the Interim Agreement
The agreement outlines several critical measures to facilitate trade. India has agreed to eliminate or reduce tariffs on a wide range of US products, including:
- All US industrial goods
- US food and agricultural products such as dried distillers' grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine, and spirits
However, the deal also includes protections for India's sensitive sectors, particularly agriculture and dairy, which had been a point of contention. This provision addresses India's initial reservations about opening its entire agricultural market to US imports, which contributed to the delay in meeting the original fall 2025 timeline for the agreement.
Addressing Non-Tariff Barriers and Expanding Trade
Both countries have committed to tackling non-tariff barriers that have hindered bilateral trade. Specifically, India has agreed to address long-standing barriers affecting US medical devices and to eliminate restrictive import licensing procedures that have delayed market access for US Information and Communication Technology (ICT) goods, including quantitative restrictions.
In a move to significantly boost economic ties, the joint statement notes that India intends to purchase USD 500 billion worth of US products over the next five years. This includes:
- Energy products
- Aircraft and aircraft parts
- Precious metals
- Technology products
- Coking coal
Additionally, the agreement aims to increase trade in technology products, such as Graphics Processing Units (GPUs) and other data centre goods, while expanding joint technology cooperation efforts.
Background and Recent Developments
The announcement follows a phone call between Prime Minister Narendra Modi and US President Donald Trump on February 2, which led to the conclusion of negotiations on this highly anticipated trade deal. Previously, the Trump administration had imposed tariffs on major exporters to the US, including India, with a 50 per cent tariff on Indian goods since August 2025. Following the recent discussions, these tariffs have been reduced to 18 per cent, easing trade tensions.
The BTA, formally proposed in February 2025, seeks to more than double bilateral trade from the current USD 191 billion to USD 500 billion by 2030. This interim framework is seen as a crucial stepping stone toward achieving that ambitious goal, fostering a stronger economic partnership between the two nations.
