New Delhi, Feb 7 (UNI) Prime Minister Narendra Modi on Saturday welcomed the announcement of a framework for an Interim Trade Agreement between India and the United States, saying it would deepen investment and technology ties, strengthen resilient supply chains, and create large-scale employment, as New Delhi seeks to boost manufacturing under its “Make in India” programme and advance its goal of becoming a developed nation.
Thanking US President Donald Trump for his “personal commitment to robust ties” between the two countries, PM Modi said, “Great news for India and USA! This framework reflects the growing depth, trust and dynamism of our partnership. It strengthens Make in India by opening new opportunities for India’s hardworking farmers, entrepreneurs, MSMEs, startup innovators, fishermen and more. It will generate large-scale employment for women and youngsters.”
Highlighting that India and the United States share a commitment to “promoting innovation,” PM Modi on social media platform X said the framework would further deepen investment and technology partnerships between the two countries.
“This framework will also strengthen resilient and trusted supply chains and contribute to global growth. As India moves forward towards building a Viksit Bharat, we remain committed to building global partnerships that are future-oriented, empower our people and contribute to shared prosperity,” he added.
The Prime Minister also tagged Commerce and Industry Minister Piyush Goyal, who posted on the social media platform X about the agreement. In his post, Goyal said the United States and India were pleased to announce that they had reached a framework for an Interim Agreement on reciprocal and mutually beneficial trade.
He said the framework reaffirmed the two countries’ commitment to the broader India–US Bilateral Trade Agreement (BTA) negotiations launched by President Donald J. Trump and Prime Minister Narendra Modi on February 13, 2025. The proposed BTA will include additional market access commitments and support more resilient supply chains.
Goyal said the Interim Agreement would represent a historic milestone in India–US relations, demonstrating a shared commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes.
Key terms of the Interim Agreement pointed out that India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits, and other products.
The United States will apply a reciprocal tariff rate of 18 percent on Indian-origin goods under the relevant executive order. These include textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, artisanal products and certain machinery. Subject to the successful conclusion of the Interim Agreement, the US will remove reciprocal tariffs on a wide range of goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
The United States will also remove tariffs on certain Indian aircraft and aircraft parts imposed under national security-related proclamations on aluminium, steel and copper. Consistent with US national security requirements, India will receive a preferential tariff rate quota for automotive parts. Depending on the findings of the US Section 232 investigation, India will also receive negotiated outcomes for generic pharmaceuticals and pharmaceutical ingredients.
Both countries have committed to providing each other with preferential market access in sectors of mutual interest on a sustained basis and to establishing rules of origin to ensure that the benefits of the agreement accrue primarily to India and the United States.
The two sides will address non-tariff barriers affecting bilateral trade. India has agreed to take steps to address long-standing barriers related to US medical devices, information and communication technology (ICT) goods, and food and agricultural products, and to review the acceptance of US-developed or international standards within six months of the agreement’s entry into force.
India and the United States will enhance cooperation on standards and conformity assessment procedures to improve ease of compliance and will allow modifications to commitments in the event of changes to agreed tariffs by either side.
Both countries will work toward expanding market access through BTA negotiations, with the United States considering India’s request to further lower tariffs on Indian goods.
The framework outlines strengthened economic security cooperation, including supply chain resilience, investment reviews, export controls, and addressing non-market policies of third parties.
India has expressed its intention to purchase USD 500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years. Both sides also agreed to significantly increase trade in technology products, including graphics processing units (GPUs), and expand joint technology cooperation.
The two countries committed to addressing barriers to digital trade and establishing a pathway for robust, mutually beneficial digital trade rules under the BTA.
Both sides said they would promptly implement the framework and work toward finalising the Interim Agreement, with a view to concluding a comprehensive and mutually beneficial Bilateral Trade Agreement in line with the agreed roadmap.
