Guwahati: India and the United States on Saturday announced that they have reached a framework for the first phase of a bilateral trade agreement under which both countries will reduce import duties on a range of goods to boost two-way trade.
The framework reaffirms the commitment of both sides to the broader US-India Bilateral Trade Agreement (BTA) negotiations, launched by President Donald Trump and Prime Minister Narendra Modi on February 13, 2025, according to a joint statement.
Under the agreement, the United States will reduce tariffs on Indian goods from 50 per cent to 18 per cent, while India will eliminate or lower import duties on all US industrial goods and a wide range of American food and agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.
The first phase of the pact is expected to be signed by mid-March. Once implemented, India will extend concessions and remove duties on US goods. Separately, the US, through an executive order, has lifted the 25 per cent tariff on Indian imports of Russian oil effective February 7, conditional on India ceasing direct or indirect imports from Russia. US officials will monitor compliance and recommend action if India resumes imports, including the possible reinstatement of the 25 per cent tariff. The reciprocal tariff is expected to be reduced to 18 per cent after a forthcoming US executive order.
The joint statement also noted that India plans to purchase USD 500 billion worth of US energy products, aircraft and parts, precious metals, technology products, and coking coal over the next five years.
Prime Minister Narendra Modi described the interim trade framework as a step to strengthen ‘Make in India’ by opening opportunities for farmers and entrepreneurs and creating jobs for women and youth. Commerce and Industry Minister Piyush Goyal said the agreement would open a USD 30 trillion market for Indian exporters, particularly benefiting MSMEs, farmers, and fishermen, as US duties on Indian goods drop from 50 per cent to 18 per cent. He added that India’s exports worth about USD 44 billion will enter the US market under zero reciprocal tariffs.
The Congress, however, criticised the pact, calling it a “surrender” of India’s self-interest. Addressing a press conference in New Delhi, Congress media and publicity department head Pawan Khera said the agreement would make India a dumping ground for American products, undermining farmers, small and medium enterprises, and the middle class.
“This deal is a betrayal of all that India stands for over the past 75 years. This is not a deal in our interest, but a total surrender,” Khera said, alleging that the government had agreed to the framework under pressure. He further criticised the Bharatiya Janata Party-led government for aligning domestic policy with the US timeline, claiming that decisions on trade and other matters were being influenced externally.
Khera added that the trade pact would further strain the agricultural sector and warned that the coming days would reveal its adverse impact on farming and domestic industries.