India secures duty-free access to US aircraft, auto parts
What's the story
India and the United States have announced a framework for a bilateral trade agreement (BTA), granting India tariff-free access to select aircraft and aircraft parts from the US. The joint statement released by the White House said that India will get a preferential tariff rate quota (TRQ) for automotive parts, subject to applicable tariffs.
Pharmaceutical benefits
'Negotiated outcomes' in generic pharmaceuticals
The joint statement also highlighted that India will be receiving "negotiated outcomes" concerning generic pharmaceuticals and ingredients. This is part of the broader commitment by both countries to provide each other preferential market access in sectors of mutual interest on a sustained basis. The BTA, which was first proposed in February 2025, aims to more than double bilateral trade from the current $191 billion to $500 billion by 2030.
Tariff reductions
India to eliminate tariffs on US industrial goods
Under the BTA, India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products. These include dried distillers' grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits among others. This move is part of India's commitment to enhance trade relations with the US while safeguarding its sensitive sectors like agriculture and dairy.
Trade barriers
Addressing non-tariff barriers
Both countries have also agreed to tackle non-tariff barriers that affect bilateral trade. India has committed to addressing long-standing trade barriers in US medical devices and removing restrictive import licensing procedures that hinder market access for or impose quantitative restrictions on US Information and Communication Technology (ICT) goods. The United States has also agreed to consider India's request for tariff reductions on Indian goods during BTA negotiations.
Future trade plans
India to purchase $500 billion worth of US products
The joint statement further noted that India plans to buy $500 billion worth of US energy products, aircraft and parts, precious metals, technology products and coking coal over the next five years. The two countries will also significantly boost trade in technology products such as Graphics Processing Units (GPUs) and other data center equipment while expanding joint tech cooperation.