India and the United States have announced a framework for an Interim Trade Agreement

India and the United States have announced a framework for an Interim Trade Agreement

¨     India and the United States have announced a framework for an Interim Trade Agreement.

¨     The framework focuses on reciprocal and mutually beneficial trade.

¨     The joint framework reaffirms commitment to the broader India–US Bilateral Trade Agreement talks.

¨     These negotiations were launched by Prime Minister Narendra Modi and President Donald Trump in February last year.

¨     The framework seeks to expand market access between the two countries.

¨     India has agreed to eliminate or reduce tariffs on all US industrial goods.

¨     India will also lower duties on a wide range of US food and agricultural products.

¨     These products include tree nuts, fresh and processed fruits, soybean oil and animal feed inputs such as dried distillers’ grains (DDGs), and red sorghum.

¨     Wine, spirits, and several additional agricultural items are also covered.

¨     The United States will apply a reciprocal tariff rate of 18 percent on Indian goods.

¨     The US will remove tariffs on selected Indian aircraft and aircraft parts.

¨     Both countries have committed to providing preferential market access to each other.

¨     Rules of origin will be established under the agreement to ensure benefits mainly accrue to India and the United States.

¨     India has agreed to resolve long-standing barriers affecting US medical devices.

¨     India will also address non-tariff issues in US food and agricultural trade.

¨     Further market access expansion will be pursued through BTA negotiations.

¨     India has stated its intention to purchase around 500 billion dollars of US goods (energy products, aircraft, and aircraft parts, precious metals, technology products, and coking coal) over the next five years.

¨  Both nations plan to significantly expand trade in technology products (Graphics Processing Units and equipment used in data centers).

¨     Both sides will work toward clear and ambitious digital trade rules, which will form part of the Bilateral Trade Agreement.

¨     The framework will be implemented promptly by both governments.

¨     Efforts will continue to finalize the Interim Agreement. The goal is to conclude a mutually beneficial Bilateral Trade Agreement.