Delhi: Prime Minister Narendra Modi on Saturday unveiled a major step forward in India–United States economic ties, announcing that both countries have agreed on a framework for an Interim Trade Agreement. The move is being seen as a turning point that could ease trade frictions and significantly expand opportunities for Indian businesses in the American market.
Sharing the update publicly, the Prime Minister highlighted that the understanding was reached after sustained engagement at the highest political level. He acknowledged the role of US President Donald Trump in helping resolve differences that had earlier led to steep tariffs on Indian products.
According to the framework, the United States will reduce reciprocal tariffs on a wide range of Indian exports to 18 percent, a sharp cut from the much higher duties imposed earlier. This change is expected to provide relief to sectors such as textiles, leather goods, footwear, machinery, and other labour-intensive industries, allowing Indian exporters better access to one of the world’s largest consumer markets.
In return, India has agreed to significantly expand imports from the US over the next few years. The proposed purchases are expected to include energy products, civil aircraft, and advanced technologies, including high-end computing equipment critical for artificial intelligence and digital infrastructure. Officials say this balanced approach reflects the growing maturity of the bilateral economic relationship.
Prime Minister Modi said the framework goes beyond trade numbers and focuses on people-centric growth. He noted that improved market access would benefit farmers, small businesses, startups, and young entrepreneurs, while also supporting job creation, particularly for women and youth. The agreement, he added, aligns closely with India’s “Make in India” and manufacturing ambitions.
Both countries have also agreed to deepen cooperation in emerging technologies, digital trade, and resilient supply chains. The framework includes a shared commitment to address unfair global trade practices and ensure economic security through trusted partnerships.
The interim arrangement is expected to serve as a stepping stone toward a full-fledged Bilateral Trade Agreement (BTA). Government sources indicate that detailed negotiations will continue, with the aim of finalising a comprehensive pact in the coming months.
