India and the United States have reached a framework for an Interim Trade Agreement that promises huge opportunities for both nations. This deal opens up a $30 trillion market for Indian MSMEs and farmers, giving them a chance to expand globally.
Under the agreement, the US will cut reciprocal tariffs on Indian goods to 18%. This creates new opportunities in sectors like textiles and apparel, leather and footwear, plastic and rubber products, and organic chemicals. Even more importantly, tariffs will drop to zero on a wide range of goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
India will also benefit from exemptions under Section 232 for aircraft parts, tariff rate quotas on auto parts, and negotiated outcomes on generic pharmaceuticals. At the same time, India has ensured protection for sensitive agricultural and dairy products such as maize, wheat, rice, soya, poultry, milk, cheese, ethanol, tobacco, vegetables, and meat.
Another major highlight is the boost in technology trade. Both countries will significantly increase cooperation in products like Graphics Processing Units (GPUs) and other goods used in data centers, strengthening India’s role in the global tech supply chain.
This agreement marks a big step forward in India-US trade relations, balancing growth opportunities with protection for key domestic sectors.
