India Gains Duty-Free US Aircraft Access in Major Bilateral Trade Deal

The joint statement from the White House noted that India will receive a preferential tariff rate quota (TRQ) for automotive parts, subject to the applicable tariff. Also, India is set to receive "negotiated outcomes" with respect to generic pharmaceuticals and ingredients. "The United States and India commit to provide each other preferential market access in sectors of respective interest on a sustained basis," the joint statement read.

The US and India have announced in the joint statement that they have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade (interim agreement), and have agreed to a framework.

The framework reaffirms the countries' commitment to the broader US-India Bilateral Trade Agreement (BTA) negotiations, launched by President Donald Trump and Prime Minister Narendra Modi on February 13, 2025, which will include additional market-access commitments and support for more resilient supply chains.

According to the joint statement, India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers' grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.

India had reservations about opening the entire US agricultural sector to Indian markets, which is why the interim trade deal apparently missed the initially set timeline - fall of 2025. The Indian side has secured protection for its sensitive sectors, particularly agriculture and dairy, in this deal.

Furthermore, both countries decided to address non-tariff barriers affecting bilateral trade. India agrees to address long-standing barriers to trade in US medical devices and to eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, US Information and Communication Technology (ICT) goods. "Recognising the importance of working together to resolve long-standing concerns, India also agrees to address long-standing non-tariff barriers to the trade in US food and agricultural products," the joint statement read.The United States also affirmed that it intends to consider, during BTA negotiations, India's request that the United States continue to work to lower tariffs on Indian goods.

The joint statement also noted that India intends to purchase USD 500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next 5 years. India and the United States will significantly increase trade in technology products, including Graphics Processing Units (GPUs) and other goods used in data centers, and expand joint technology cooperation.

On February 2, a phone call between Prime Minister Narendra Modi and US President Donald Trump led to the announcement of a conclusion of negotiations on the much-awaited trade deal.

The Trump administration had imposed tariffs on major exporters to the US, including India and China. There was a 50 per cent tariff on goods from India entering the United States since August 2025. The tariffs have now been reduced to 18 per cent following the leaders' recent phone call.

The BTA, formally proposed in February 2025, seeks to more than double bilateral trade, from the current USD 191 billion to USD 500 billion by 2030.

- ANI