India and the United States have agreed on a framework for an Interim Trade Agreement, in a move expected to strengthen bilateral trade and economic cooperation. The announcement was made through a joint statement issued on Saturday, signalling progress in negotiations between the two countries.

The interim framework is aimed at expanding market access for both sides, reducing tariffs on several products, and boosting trade in key industrial, agricultural, and technology sectors. The development comes after months of talks between New Delhi and Washington, which had earlier faced a setback after the US imposed high tariffs on Indian imports.

As per the framework, the United States will reduce tariffs on a wide range of Indian products. Reports said the US will cut tariffs from 50% to 18% on multiple categories, including textiles and apparel, leather and footwear, plastic and rubber goods, organic chemicals, home décor and artisanal products, and select machinery.

The US also indicated that if the interim agreement is successfully concluded, it will remove tariffs on additional Indian exports such as generic pharmaceuticals, gems and diamonds, and aircraft parts, which could benefit Indian exporters.

In return, India will reduce or eliminate tariffs on a broad set of American products. These include industrial goods as well as agricultural and food items. The products listed under the framework include dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.

The interim deal also outlines India’s intent to purchase goods worth $500 billion from the United States over the next five years. These purchases include US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal.

Union Commerce and Industry Minister Piyush Goyal said the interim trade agreement also safeguards India’s agriculture and dairy sector. According to him, sensitive farm and dairy products will remain protected, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol for fuel, tobacco, certain vegetables and meat.

Goyal also said the agreement would provide Indian exporters access to the $30 trillion US market, particularly benefiting MSMEs, farmers and fishermen, and is expected to create large-scale employment opportunities for women and youth.

The framework also includes provisions related to preferential market access. The US will remove certain tariffs on Indian aircraft and aircraft parts imposed earlier on national security grounds. India is expected to receive tariff-rate quotas for automotive parts and negotiated outcomes for generic pharmaceuticals and ingredients

The agreement further covers technology and digital trade cooperation. Both sides have committed to addressing barriers to digital commerce, boosting trade in technology products such as GPUs and data centre equipment, and strengthening joint technology cooperation. India will also work towards easing non-tariff barriers affecting US medical devices, ICT goods and food products. It will remove restrictive import licensing and review standards within six months to improve market access.

Officials said both countries will continue discussions to finalise the interim trade agreement and move towards a comprehensive bilateral trade agreement in the future.

Prime Minister Narendra Modi later welcomed the development and said the deal reflects growing trust between the two nations and will strengthen domestic manufacturing under the Make in India initiative.

PM Modi posted on X, “Great news for India and USA! We have agreed on a framework for, an Interim Trade Agreement between our two great nations. I thank President Trump for his personal commitment to robust ties between our countries.”

He added, “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.”

Modi further said, “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.”