India & US issue joint statement announcing framework for an Interim Trade Agreement

 India and US today announced that they have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade. 

 

Commerce and Industry Ministry shared the India-US Joint Statement which said that the framework reaffirms the countries’ commitment to the broader U.S.-India Bilateral Trade Agreement (BTA) negotiations, launched by Prime Minister Narendra Modi and US  President Donald Trump on 13th February last year, which will include additional market access commitments and support more resilient supply chains. 

 

The Interim Agreement between both countries will represent a historic milestone in the countries’ partnership, demonstrating a common commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes. 

 

The Joint Statement said India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products.

 

These include dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products. 

 

The United States will apply a reciprocal tariff rate of 18 percent on goods of India, including textiles and apparel, leather and footwear, plastic and rubber, organic chemicals, home décor, artisanal products, and certain machinery.

 

The United States will also remove tariffs on certain aircraft and aircraft parts of India imposed to eliminate threats to national security.

 

Both countries have committed to provide each other with preferential market access in sectors of respective interest on a sustained basis. India and US will establish rules of origin that ensure that the benefits of the Agreement accrue predominantly to both countries. 

 

The two countries will address non-tariff barriers that affect bilateral trade. India has agreed to address long-standing barriers to the trade in US medical devices.

 

India has also agreed to address long-standing non-tariff barriers to the trade in US food and agricultural products. 

 

India and US will work towards further expanding market access opportunities through the negotiations of the BTA. 

 

US has affirmed that it intends to take into consideration, during the negotiations of the BTA, India’s request that the US continue to work to lower tariffs on Indian goods. 

 

The Joint Statement said India intends to purchase 500 billion dollars of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next 5 years. 

 

India and the United States will significantly increase trade in technology products, including Graphics Processing Units (GPUs) and other goods used in data centers, and expand joint technology cooperation. 

 

Both nations have committed to addressing discriminatory or burdensome practices and other barriers to digital trade and to setting a clear pathway to achieve robust, ambitious, and mutually beneficial digital trade rules as part of the BTA. 

 

The Joint Statement added that India and US will promptly implement this framework and work towards finalising the Interim Agreement with a view to concluding a mutually beneficial BTA consistent with the roadmap agreed in the Terms of Reference.