Both sides to reduce import duties
WASHINGTON/ NEW DELHI, Feb 7:
India and the US today announced they have reached a framework for an interim trade agreement under which both sides will reduce import duties on a number of goods to boost two-way trade.
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While the US will reduce tariffs on Indian goods to 18 per cent from the present 50 per cent, India will eliminate or cut down import duties on all US industrial goods and a wide range of American food and agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soyabean oil, wine and spirits.
According to a joint statement issued by both sides, India has expressed its intention to purchase USD 500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years.
“The US and India are pleased to announce that they have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade,” the statement said.
Further, through an executive order, US President Donald Trump has removed the 25 per cent tariffs, or additional import duty, that it imposed on India in August last year for purchasing Russian oil, citing that the country has undertaken “significant steps” and New Delhi has committed to stopping directly or indirectly importing oil from Moscow.
“Effective with respect to goods entered for consumption, or withdrawn from the warehouse for consumption, on or after 12.01 am eastern standard time on February 7, 2026, products of India imported into the United States shall no longer be subject to the additional ad valorem rate of duty of 25 per cent imposed pursuant to Executive Order 14329,” the order said.
On the development, Prime Minister Narendra Modi said the interim trade pact will strengthen ‘Make in India’ by opening up new opportunities for farmers and entrepreneurs, and create jobs for women and youngsters.
Commerce and Industry Minister Piyush Goyal said the interim pact will open a USD 30 trillion market for Indian exporters, especially MSMEs, farmers and fishermen, as the US duties on Indian goods will come down to 18 per cent from 50 per cent earlier.
In August last year, the US imposed 25 per cent reciprocal tariffs and an additional 25 per cent levy on India for its purchase of Russian oil, hitting Indian exporters hard as America is their largest export destination.
The reduction in tariffs will help boost exports of India’s labour-intensive sectors such as textiles and apparel, leather and footwear, plastic and rubber, organic chemicals, home decor, artisanal products and certain machinery.
Additionally, tariffs will go down to zero on a wide range of goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts, thereby further enhancing India’s export competitiveness and Make in India.
India will also get exemptions under section 232 on aircraft parts, tariff rate quota on auto parts and negotiated outcomes on generic pharmaceuticals, leading to tangible export gains in these sectors.
“At the same time, the agreement reflects India’s commitment to safeguarding farmers’ interests and sustaining rural livelihoods by completely protecting sensitive agricultural and dairy products, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables, meat, etc,” Goyal said.
In the pact, while import duties are likely to be eliminated by India in certain areas for the US on the day the agreement comes into force, in others they may be phased out over time. In some sectors, duties will be reduced, while in others, quota-based concessions will be provided. (PTI)
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