The United States and India have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade. This framework serves as a major milestone toward a comprehensive U.S.-India Bilateral Trade Agreement (BTA) and establishes a roadmap for balanced trade and supply chain resilience.

The key provisions of the agreement include:

• • Indian Commitments: India will eliminate or significantly reduce tariffs on all U.S. industrial goods and a wide range of agricultural products, including tree nuts, fresh fruit, soybean oil, wine, spirits, and red sorghum.

  • U.S. Commitments: The U.S. will apply a reciprocal tariff rate of 18 percent on specific Indian goods (such as textiles, leather, and certain machinery). However, the U.S. will remove reciprocal tariffs on generic pharmaceuticals, gems, and diamonds, as well as national security-related tariffs on Indian aircraft parts.

  • Preferential Access: India will receive a preferential tariff rate quota for automotive parts and negotiated outcomes for generic pharmaceutical ingredients.

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  • High-Tech Trade: The nations will significantly increase trade in technology, specifically Graphics Processing Units (GPUs) and other hardware essential for data centers.

• • Non-Tariff Barriers: India has agreed to resolve long-standing barriers affecting U.S. medical devices and Information and Communication Technology (ICT) goods.

  • Standards and Licensing: India will work to eliminate restrictive import licensing and determine the acceptability of U.S.-developed testing standards within six months.

  • Digital Trade: Both countries committed to removing burdensome practices in digital trade to foster a robust digital economy.

• • Strategic Alignment: The agreement strengthens alignment on export controls and investment reviews.

  • Countering Third Parties: The U.S. and India will cooperate to address the "non-market policies" of third parties (likely aimed at China) to enhance global supply chain resilience.

Conclusion:
This framework represents a "historic milestone" in the U.S.-India partnership. By focusing on reciprocal market access and massive procurement deals, the Trump Administration and the Modi Government aim to create a more balanced economic relationship that prioritizes domestic industries in both nations.

Tariff Reductions and ReciprocityMajor Purchase AgreementsAddressing Trade BarriersEconomic Security and Supply Chains