US-India Trade Talks Continue After Trump-Modi Deal on Tariffs & Barriers

The fact sheet follows last Friday's joint statement issued after a call between Trump and Prime Minister Narendra Modi, during which the two leaders agreed on a framework for an Interim Agreement on reciprocal trade and reaffirmed their commitment to a broader US-India Bilateral Trade Agreement.

According to the White House, the two countries will continue negotiations to address remaining tariff barriers, additional non-tariff barriers, technical barriers to trade, customs and trade facilitation, and good regulatory practices.

Talks will also continue on trade remedies, services and investment, intellectual property, labor, environment, government procurement, and trade-distorting or unfair practices of state-owned enterprises, the fact sheet said.

While negotiations remain ongoing in several sensitive areas, the document outlines immediate measures already agreed upon under the interim framework.

Trump agreed to remove an additional 25 per cent tariff on imports from India. The White House said the move reflects India's commitment to stop purchasing oil from the Russian Federation. Trump signed an executive order last Friday removing the added duty.

The United States will also lower the Reciprocal Tariff on India from 25 per cent to 18 per cent, citing India's willingness to align with Washington on systemic trade imbalances and shared national security challenges.

The fact sheet details tariff commitments by India on US goods. India will eliminate or reduce tariffs on all American industrial products and a wide range of US agricultural and food items.

These include dried distillers' grains, red sorghum, tree nuts, fresh and processed fruit, certain pulses, soybean oil, wine and spirits, and other products.

India also committed to significantly expand purchases from the United States. According to the document, New Delhi will buy more American products and purchase over $500 billion worth of US energy, information and communication technology, agricultural, coal and other goods.

On regulatory issues, India agreed to address non-tariff barriers affecting bilateral trade in priority areas. The two sides will negotiate rules of origin to ensure that the benefits of the agreement accrue predominantly to the United States and India.

Digital trade is another key component. India will remove its digital services taxes and is committed to negotiating bilateral digital trade rules. These rules would address discriminatory or burdensome practices and prohibit customs duties on electronic transmissions.

The United States and India also agreed to strengthen economic security alignment to enhance supply chain resilience and innovation. This includes cooperation to address non-market policies of third parties, as well as coordination on inbound and outbound investment reviews and export controls.

Technology cooperation features prominently in the framework. The fact sheet said the two countries will significantly increase bilateral trade in technology products and expand joint technology collaboration.

The White House said India has historically maintained some of the highest tariffs imposed on the United States by any major economy, averaging as high as 37 per cent on agricultural goods and exceeding 100 per cent on certain automobiles. It also cited India's past use of protectionist non-tariff barriers.

The fact sheet follows Trump's April 2, 2025 declaration of a national emergency over the US goods trade deficit, which he attributed to a lack of reciprocity in bilateral trade relationships.

- IANS