The US and India set out a framework for their interim trade accord that advances negotiations toward a broader bilateral pact according to a bilateral statement published by India’s Ministry of Commerce & Industry.

The arrangement aims to widen market access, align economic security policies and bolster supply chain resilience, reflecting shared efforts to counter disruptive third party practices and expand technology cooperation, including data-centre hardware.

The interim nature of the agreement was unclear until the joint statement was issued, and until then it was assumed that the trade deal was in essence a Free Trade Agreement(FTA) which was highly anticipated since January 2025 when the US President Donald Trump took office for his second term.

Under the framework, India will cut or remove tariffs on US industrial goods and a range of agricultural imports such as feed grains, tree nuts, fruit, soybean oil, wine and spirits.

The US will apply only a 18% reciprocal tariff on specified Indian exports lowering it from 25% and outright removing another 25% punitive tariffs for buying Russian hydrocarbons entirely, with scope to withdraw duties on selected items, including generic medicines, gems, diamonds and aircraft components, once the agreement is concluded.

Washington will also lift certain national-security tariffs on Indian aircraft parts and provide preferential access for automotive components within quota limits, subject to statutory reviews. Both sides will establish rules of origin, streamline standards recognition and address non-tariff barriers.

India will move to ease restrictions affecting US medical devices and information and communication technology imports, while reviewing testing and certification requirements across agreed sectors.

The partners will also cooperate on digital trade rules, investment screening and export controls. India plans to purchase $500bn of US energy, aerospace equipment, precious metals and technology goods over five years.

The countries will now work to finalise the interim accord and pursue a comprehensive deal, a step investors view as supportive for trade flows and cross-border investment.

However the Trump administration has also warned India in several statements that any resumption of hydrocarbon purchases from Russia will lead to higher tarrifs as penalties. Meanwhile Russian officials have denied that India has communicated its desire to stop purchases. However reports suggest that India's purchase of Russian crude oil has not stopped.