The White House on Friday said that the recently announced “historic trade deal” between India and the United States will significantly expand access for American products to the Indian market, which includes more than 1.4 billion consumers.
In a statement, the White House said that US President Donald J. Trump formally announced the trade agreement with India last week through a joint statement. “Last Friday, in a Joint Statement, President Donald J. Trump announced a trade deal between the United States and India that will open up India’s market of over 1.4 billion people to American products,” the statement said.
Trump-Modi Call Sets Framework for Interim Trade Agreement
According to the White House, the joint statement followed a phone conversation between President Trump and Prime Minister Narendra Modi, during which both leaders agreed on a framework for an Interim Agreement on reciprocal trade. They also reiterated their commitment to advancing negotiations for a broader US-India Bilateral Trade Agreement (BTA).
US Removes Additional 25% Tariff on Indian Imports
As part of the discussions, President Trump agreed to remove the additional 25 per cent tariff imposed on imports from India. The White House said this decision was taken in recognition of India’s commitment to stop purchasing oil from the Russian Federation. “Accordingly, the President signed an Executive Order last Friday removing that additional 25% tariff,” the statement said.
The White House further noted that, in light of India’s willingness to align with the United States on addressing systemic trade imbalances and shared national security challenges, the US will reduce the Reciprocal Tariff on Indian goods from 25 per cent to 18 per cent.
India to Slash Duties on US Industrial and Agricultural Goods
Under the key terms of the agreement, India will eliminate or lower tariffs on all US industrial goods and a broad range of American agricultural and food products. These include dried distillers’ grains (DDGs), red sorghum, tree nuts, fresh and processed fruits, certain pulses, soybean oil, wine and spirits, along with additional products.
India Commits to $500 Billion Purchases of American Products
India has also committed to increasing its purchases of American goods, including plans to buy more than USD 500 billion worth of US energy, information and communication technology products, agricultural goods, coal and other items, according to the statement.
The agreement also includes provisions for India to address non-tariff barriers that have impacted bilateral trade in priority sectors. Both countries will negotiate rules of origin to ensure that the benefits of the agreement primarily accrue to the United States and India.
Digital Trade Rules: India to Remove Digital Services Tax
On digital trade, the White House said India will remove its digital services taxes and has agreed to negotiate comprehensive bilateral digital trade rules. These rules are intended to address discriminatory or burdensome practices and other barriers, including provisions prohibiting customs duties on electronic transmissions.
US, India to Strengthen Economic Security and Tech Cooperation
The two countries also committed to strengthening economic security cooperation. This includes collaboration to improve supply chain resilience, address non-market policies of third countries, and enhance coordination on investment reviews and export controls. The US and India also plan to significantly expand bilateral trade in technology products and deepen joint technology cooperation.
The White House statement highlighted long-standing US concerns over India’s trade policies, noting that India maintains some of the highest tariffs among major global economies. “India has maintained some of the highest tariffs on the United States of any major world economy, with tariffs as high as an average of 37% for agricultural goods and more than 100% on certain autos,” the statement said, adding that India has also imposed protectionist non-tariff barriers that have restricted many US exports.
Roadmap Set for Interim Deal, Full Bilateral Trade Agreement
Looking ahead, the statement said that both countries will move quickly to implement the agreed framework and work toward finalising the Interim Agreement. The goal is to eventually conclude a comprehensive and mutually beneficial Bilateral Trade Agreement.
“In the coming weeks, the United States and India will promptly implement this framework and work toward finalising the Interim Agreement with a view to concluding a mutually beneficial BTA to lock in benefits for American workers and businesses,” the White House said.
The statement added that negotiations will continue to address remaining tariff and non-tariff barriers, technical trade issues, customs facilitation, regulatory practices, services and investment, intellectual property, labour and environmental standards, government procurement, and trade-distorting practices by state-owned enterprises.
The White House said the agreement aligns with the national emergency declared by President Trump on April 2, 2025, which cited persistent US trade deficits driven by a lack of reciprocity, unfair tariffs, and non-tariff barriers imposed by trading partners.
President Trump, the statement said, remains focused on advancing American economic interests by removing trade barriers and expanding market access for US exporters, particularly in the agricultural sector.
