'Will Open $30 Trillion Market for India': Interim Trade Deal With US Finalised
India and the US have agreed on an interim trade deal, reducing tariffs and expanding market access.
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India and the United States have finalised a framework for an interim trade agreement, effective from 7 February 2026. The deal reduces US tariffs on Indian goods to 18% and removes an additional 25% duty previously imposed. India will lower or eliminate tariffs on a range of US industrial and agricultural products, while sensitive sectors such as dairy and cereals remain protected. The agreement is positioned as a step towards a broader Bilateral Trade Agreement.
According to The Hindu, the interim agreement is expected to expand market access for exporters in both countries and provide a stable trade framework. Industry bodies such as FICCI and PHDCCI have welcomed the deal, highlighting its potential to boost manufacturing, innovation, and technology collaboration. The agreement also includes provisions for tariff-free access to certain US aircraft and aircraft parts for India.
As reported by Hindustan Times, the US will apply an 18% reciprocal tariff on Indian-origin goods, covering sectors such as textiles, leather, plastics, chemicals, and machinery. The deal also addresses non-tariff barriers and includes a safeguard clause allowing either country to modify commitments if tariff levels change in the future. India has committed to purchasing $500 billion worth of US energy products, aircraft, metals, and technology over five years.
As highlighted by Financial Express, the agreement reaffirms both countries’ commitment to a broader Bilateral Trade Agreement. The framework aims to deepen economic ties, with Commerce Minister Piyush Goyal stating that the deal will open a $30 trillion market for Indian exporters, particularly benefiting MSMEs, farmers, and fishermen. The minister emphasised that sensitive agricultural and dairy products remain fully protected under the agreement.
As noted in an article by Siasat, the Congress party criticised the joint statement for lacking detail and raised concerns about the impact on Indian farmers and the country’s trade surplus. The opposition highlighted that the US could reimpose the 25% penalty tariff if India resumes Russian oil imports, and claimed that the deal would triple India’s annual imports from the US.
"The interim pact will open a USD 30 trillion market for Indian exporters, especially MSMEs, farmers and fishermen, as US duties on Indian goods will come down to 18 per cent from 50 per cent earlier," Prime Minister Narendra Modi stated.
At the start of the agreement, coverage revealed that India will eliminate or reduce tariffs on US industrial goods and a wide range of agricultural products, including tree nuts, fruits, soybean oil, wine, and spirits. However, cereals, dairy, and genetically modified crops remain excluded, with India maintaining protections for these sensitive sectors to safeguard rural livelihoods.
Key details of the deal were summarised as including the removal of non-tariff barriers, increased cooperation in technology trade, and a pathway to a full Bilateral Trade Agreement. Both countries have agreed to align standards and conformity assessments in mutually agreed sectors, and to address discriminatory or burdensome practices in digital trade.
Commerce Minister Piyush Goyal’s statements indicated that the deal will create lakhs of new jobs, especially for women and youth, and support India’s vision of becoming a developed nation. The framework also aims to strengthen supply chains and facilitate joint technology cooperation between the two countries.
"The agreement reflects India’s commitment to safeguarding farmers’ interests and sustaining rural livelihoods by completely protecting sensitive agricultural and dairy products," Commerce Minister Piyush Goyal stated.
Implementation of the interim framework is expected to be prompt, with both sides working towards finalising a mutually beneficial Bilateral Trade Agreement. The joint statement affirms ongoing negotiations and the shared goal of expanding market opportunities and economic engagement.
Note: This article is produced using AI-assisted tools and is based on publicly available information. It has been reviewed by The Quint's editorial team before publishing.