NEW DELHI
Prime Minister Narendra Modi has welcomed what he described as a landmark interim trade agreement between India and the United States, calling it a major boost to economic cooperation, job creation and India’s long-term growth ambitions, as both countries move closer to a comprehensive bilateral trade deal.
Reacting to the announcement, Modi said the agreement reflects the growing trust and depth of the India-US strategic partnership, and thanked U.S. President Donald Trump for his personal commitment to strengthening economic ties. He said the framework would support India’s Make in India initiative, expand employment opportunities and open new markets for Indian farmers, small businesses, start-ups and exporters.
The interim trade framework, finalized after months of negotiations, aims to ease long-standing trade frictions and reset commercial relations between the two economies. Under the agreement, both sides have committed to lowering tariffs and addressing non-tariff barriers, while continuing talks toward a full-fledged bilateral trade agreement.
According to officials, the United States will apply a reciprocal tariff of around 18 percent on Indian exports, replacing higher or more uncertain duties, while India has agreed to reduce or eliminate tariffs on several U.S. products across industrial and agricultural sectors. The framework also provides zero-duty access for select Indian exports, including generic pharmaceuticals, gems and jewellery, and aircraft components, significantly improving market access to the U.S.
The agreement includes commitments to improve cooperation on digital trade, investment rules and supply-chain resilience, areas seen as increasingly critical amid global economic uncertainty. India has also signaled its intention to increase purchases of U.S. goods over the next five years, including in energy, aviation and advanced technology sectors.
Industry groups in India have welcomed the deal, describing it as a relief for exporters and a step toward greater certainty in trade relations with the country’s largest export market. Officials say the framework is expected to encourage fresh investment flows and deepen integration between Indian and American businesses.
Commerce and industry leaders credited the political push from both governments for breaking the deadlock, noting that previous tariff disputes had weighed on bilateral trade. U.S. officials have described the agreement as having significant long-term potential, calling it a foundation for balanced and sustainable trade growth.
The interim framework is expected to be implemented in phases, with technical teams from both sides continuing negotiations on unresolved issues. For New Delhi, the deal is being positioned as a strategic economic milestone, reinforcing India’s role in global supply chains while strengthening one of its most important international partnerships.
Both governments say the agreement marks not an endpoint, but a critical step toward a broader, more ambitious India-US trade pact in the months ahead.
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