U.S. and India announce provisional trade deal… Tariffs on Indian goods to be cut from 50% to 18%

The United States and India unveiled a provisional trade agreement framework centered on tariff cuts and market opening. Under the deal, U.S. tariff rates on Indian goods are expected to fall from 50% to 18%.

According to NDTV and other foreign media on the 7th (local time), the two countries said in a joint statement that they had agreed on a provisional trade framework that includes tariff reductions and stronger economic cooperation. It is the first concrete agreement made public since U.S. President Donald Trump and Indian Prime Minister Narendra Modi recently aligned in a phone call on pushing ahead with trade negotiations.

Under the agreement, the U.S. will sharply cut tariffs on most Indian goods, while India will halt imports of Russian crude oil and ease trade barriers. President Trump signed an executive order on the day withdrawing a punitive 25% tariff that had been imposed on India. However, the measure to adjust reciprocal tariffs to 18% is likely to be implemented later through a separate process.

India also pledged to purchase about $500 billion worth of U.S. goods over the next five years, including energy, aircraft and parts, and information technology (IT) products. It also plans to ease some tariff and non-tariff barriers on U.S. agricultural products, medical devices, and telecommunications equipment.

The two sides also agreed to step up cooperation on supply-chain resilience and economic security, as well as in investment screening and export controls related to third countries. A formal trade agreement is expected to be signed next month after further negotiations.

Prime Minister Modi said the agreement would contribute to building trusted supply chains and to global growth, while India’s opposition criticized it, raising concerns about damage to national interests.