Washington: The White House on Friday said a “historic trade deal” between India and the United States will open Indian markets to American products, marking a significant step forward in bilateral economic ties.

“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 White House said.

The Joint Statement followed a phone call last week between US President Donald Trump and Prime Minister Narendra Modi, during which the two leaders agreed on a framework for an interim agreement on reciprocal trade and reaffirmed their commitment to negotiations on a broader US–India Bilateral Trade Agreement (BTA).

Lower tariffs

During the call, President Trump also agreed to remove an additional 25 per cent tariff on imports from India, citing New Delhi’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.

In addition, the United States will lower its reciprocal tariff on India from 25 per cent to 18 per cent, citing India’s willingness to align with Washington on addressing systemic trade imbalances and shared national security challenges.

Under the key terms of the agreement, India will eliminate or reduce tariffs on all US industrial goods and a wide range of American food and agricultural products. These include dried distillers’ grains (DDGs), red sorghum, tree nuts, fresh and processed fruit, certain pulses, soybean oil, wine and spirits, among other products.

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India has also committed to increasing purchases of American goods, including more than USD 500 billion worth of US energy, information and communication technology, agricultural products, coal and other items, the White House said.

The agreement further provides for action by India to address non-tariff barriers affecting bilateral trade in priority areas. Both sides will negotiate rules of origin to ensure that the benefits of the agreement accrue primarily to the United States and India.

As part of the framework, India will remove its digital services taxes and has agreed to negotiate a robust set of bilateral digital trade rules. These rules will address “discriminatory or burdensome practices and other barriers to digital trade, including rules that prohibit the imposition of customs duties on electronic transmissions,” according to the statement.

The two countries also committed to strengthening economic security alignment to enhance supply chain resilience and innovation. This will include cooperation on addressing non-market policies of third parties, as well as coordination on inbound and outbound investment reviews and export controls.

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Bilateral trade in technology products is expected to rise significantly, alongside expanded joint technology cooperation.

“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 “highly protectionist non-tariff barriers” that have restricted many US exports.

The White House said the two sides will move swiftly to implement the framework in the coming weeks and work towards finalising the interim agreement, with the aim of concluding a mutually beneficial BTA.

Negotiations will continue on outstanding issues including remaining tariff and non-tariff barriers, customs and trade facilitation, services and investment, intellectual property, labour and environmental standards, government procurement, and trade-distorting practices by state-owned enterprises.

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The agreement is aligned with the national emergency declared by President Trump on April 2, 2025, in response to what the administration described as a large and persistent US goods trade deficit driven by a lack of reciprocity, unfair trade practices and economic policies that suppress domestic wages and consumption.

The White House said President Trump continues to prioritise the interests of American workers and businesses by removing tariff and non-tariff barriers and expanding market access for US exporters, particularly in the agricultural sector.