Goyal also indicated that India’s free trade agreements with the United Kingdom and Oman are likely to be implemented in April, while the pact with New Zealand is expected to take effect in September.
Also Read: India-US to begin 3 day negotiations to finalise interim trade pact
Indian and American negotiators will meet in the US from February 23 for three days to finalise the legal text of the interim agreement. The discussions are aimed at converting an already agreed framework into a binding document.
Earlier this month, the two countries issued a joint statement confirming that the contours of an interim trade framework had been settled. The framework focuses on lowering select tariffs, deepening energy trade, and expanding economic cooperation, while leaving room for further negotiations toward a comprehensive bilateral trade agreement.
Under the interim arrangement, both countries are expected to grant duty concessions on a range of goods. The US has indicated it will lower reciprocal tariffs on Indian products from 25 per cent to 18 per cent and has already removed the 25 per cent punitive tariffs imposed on India over its purchases of Russian crude oil.
The framework also outlines significant market access commitments. India has agreed to purchase $500 billion worth of American goods over five years. The proposed basket includes oil and gas, coking coal, aircraft and aircraft parts, precious metals, and advanced technology products such as graphics processing units used in artificial intelligence and data centres.In return, India will reduce or eliminate tariffs on several US industrial and agricultural items, including dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruits, soybean oil, wine and spirits.
The US, however, will retain an 18 per cent tariff on most Indian imports, covering textiles, apparel, leather goods, footwear, plastics, organic chemicals, home decor, artisanal products and certain machinery. India is expected to receive tariff relief on specific aircraft and aircraft parts, along with a lower-tariff quota for auto components. The treatment of generic pharmaceuticals and their ingredients will depend on the outcome of ongoing US tariff investigations.
Also Read: India sets ₹25,000 crore export engine in motion as Goyal launches plan
Goyal said the framework opens up opportunities for Indian farmers, fishermen and micro, small and medium enterprises to access the $30 trillion US market. He added that once the agreement is formally signed, India’s tariff reductions on US exports would come into effect.
In a subsequent development, Washington revised its official fact sheet on the deal, altering some key references. The term “certain pulses” was removed from the list of American products on which India would lower or eliminate tariffs.
The updated document now refers more broadly to US industrial and agricultural goods, including dried distillers’ grains, red sorghum, tree nuts, fruits, soybean oil, wine and spirits. Notably, language in the earlier version stating that India would remove its digital services taxes has been dropped. The revised text retains only India’s commitment to negotiate bilateral digital trade rules addressing discriminatory or burdensome practices.