US and India Strike Interim Trade Deal, India – US Step Toward $500 Billion Trade Agreement with Interim Pact

The United States and India have announced an interim trade framework, taking a major step toward a comprehensive bilateral trade agreement expected by March 2026.

The framework aims to lower tariffs, strengthen supply chains, and expand energy and technology cooperation between the two nations, while addressing broader geopolitical concerns in Asia.

Under the agreement:

• The S. will reduce tariffs on most Indian imports from up to 50% to 18%, while India will eliminate or lower tariffs on a wide range of U.S. goods, including industrial products and agricultural items such as fruits, nuts, soybean oil, wine, and animal feed.
• India has committed to purchasing $500 billion worth of U.S. goods over five years, covering energy, aircraft, technology products—including GPUs for artificial intelligence—and precious metals.
• In a significant policy shift, India has agreed to halt direct and indirect purchases of Russian oil, prompting the U.S. to remove a previously imposed 25% punitive tariff.
• Both countries will collaborate to harmonize technical standards, reduce non-tariff barriers, and improve export controls, particularly in sectors such as medical devices, communications, and technology.

While India secured protections for sensitive agricultural sectors, electric vehicles, including Tesla, were excluded from tariff relief, though high-end U.S. vehicles like Harley-Davidson motorcycles benefit from reduced duties.

Officials say the framework strengthens the strategic partnership between the two countries, boosts Indian exports in textiles, chemicals, pharmaceuticals, and machinery, and helps diversify global supply chains away from China. Analysts expect the full pact to become one of the largest U.S.–India trade agreements in recent history.