PM Modi announces framework for India-US interim trade agreement pact
What's the story
India and the United States have reached a framework for an interim trade agreement, according to a joint statement released on Saturday. The agreement will apply a reciprocal tariff rate of 18% on goods from India. Prime Minister Narendra Modi welcomed the framework for the interim agreement as "great news." If successfully concluded, tariffs will be eliminated on several products, such as generic pharmaceuticals, gems and diamonds, and aircraft parts.
PM's statement
PM Modi hails framework
This move is expected to boost India's export competitiveness and support the "Make in India" campaign. In a post on the social media platform X, PM Modi said, "It will generate large-scale employment for women and youngsters." Writing of the shared commitment between the two countries to promote innovation, he added that the "framework will also strengthen resilient and trusted supply chains and contribute to global growth." Modi said India remains "committed to...empower our people, and contribute to shared prosperity."
Twitter Post
PM Modi's full statement on X
Great news for India and USA!
— Narendra Modi (@narendramodi) February 7, 2026
We have agreed on a framework for an Interim Trade Agreement between our two great nations. I thank President Trump for his personal commitment to robust ties between our countries.
This framework reflects the growing depth, trust and dynamism of… https://t.co/zs1ZLzamhd
Tariff reduction
India to reduce or eliminate tariffs on US industrial goods
Under the agreement, India will also reduce or eliminate tariffs on all US industrial goods and a wide range of agricultural products. These include dried distillers' grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine, and spirits, among others. The two countries have committed to quickly implementing this framework and finalizing the interim agreement in line with the agreed roadmap.
Trade expansion
India to purchase $500 billion worth of US goods
The interim agreement also states that India will purchase $500 billion worth of US goods over five years. These include energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal. The United States Trade Representative (USTR) has welcomed this deal as it expands market access for American farmers and producers to one of the world's largest economies.
Protection measures
Sensitive agricultural products fully protected under this trade agreement
However, India has fully protected sensitive agricultural and dairy products such as maize, wheat, rice, and soya, among others, from duty concessions under this trade agreement. Commerce and Industry Minister Piyush Goyal said this reflects India's commitment to protecting farmers' interests and sustaining rural livelihoods. He also emphasized that the increase in exports will create new job opportunities for women and youth in India.
Economic impact
US farmers, producers will benefit from this deal
USTR Ambassador Greer has called this trade deal a significant benefit for US workers, farmers, and producers. He said President Donald Trump's dealmaking is unlocking one of the largest economies in the world for American workers and producers. The joint statement from both countries also noted that India will get duty-free access to certain aircraft and aircraft parts from the US under this agreement.