India–US interim trade pact: Modi hails Make in India boost, Goyal cites major export opportunity

India and the United States have moved closer to a major trade reset after Washington issued an executive order withdrawing an additional 25% oil-linked tariff on Indian goods, while both sides announced a framework for an interim trade agreement that will progressively lower duties and expand market access.

The White House said the extra 25% ad valorem duty was being removed because India has committed to stop directly or indirectly importing Russian oil. With this step, the effective US tariff on Indian goods falls to 25% from 50%. It will drop further to 18% once the interim trade deal is formally signed by both governments.

In a joint statement, the two countries said the framework would be implemented “promptly” and converted into a legally binding agreement by mid-March. Officials indicated that tariff concessions would take effect after the signing.

Modi hails boost to ‘Make in India’

Prime Minister Narendra Modi welcomed the agreement, calling it “great news” for both countries. He said the framework would strengthen Make in India, create jobs for women and youth, and open new opportunities for farmers, MSMEs, start-ups, entrepreneurs and fishermen.

Thanking US President Donald Trump for his “personal commitment” to bilateral ties, Modi said the pact reflected growing trust between the two nations and would deepen investment, technology collaboration and resilient supply chains.

Goyal: $30 trillion market access

Commerce and Industry Minister Piyush Goyal said the deal would open a $30 trillion US market for Indian exporters, especially MSMEs, farmers and fishermen, and generate lakhs of new jobs.

Under the framework, the US will cut reciprocal tariffs on Indian goods to 18%, benefiting sectors such as textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, artisanal products and select machinery.

Once fully implemented, duties are expected to fall to zero on a wide range of products, including generic pharmaceuticals, gems and diamonds, and aircraft parts — giving a further push to India’s export competitiveness.

What India gains

What India protects

India has secured safeguards for sensitive farm and dairy products, keeping protections intact for maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables and meat.

Tech and defence angle

Both countries plan to significantly expand trade in high-technology products, including GPUs and data-centre equipment, and align technical standards to ease compliance.

Separately, the White House said the framework also includes plans to deepen India–US defence cooperation over the next decade.

What happens next

The interim framework will be converted into a legal agreement, likely to be signed by mid-March. The 18% tariff will take effect after that signing, while negotiations for a broader Bilateral Trade Agreement (BTA) will continue in parallel.

-With agencies inputs

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