India–US Interim Trade Framework To Open USD 30 Tn Market For Exporters: Piyush Goyal

New Delhi, Feb 7 (KNN) India and the United States have reached a framework for an Interim Trade Agreement aimed at expanding bilateral trade and strengthening economic cooperation. 

In a social media post, Piyush Goyal said, “Under the decisive leadership of PM Narendra Modi ji, India has reached a framework for an Interim Agreement with the US. This will open a USD 30 trillion market for Indian exporters, especially MSMEs, farmers and fishermen. The increase in exports will create lakhs of new job opportunities for our women and youth.”

MSME Industry Response

Commenting on this, the Federation of Indian Micro and Small & Medium Enterprises (FISME) communiqué said, “This balanced and forward-looking agreement—focusing on tariff rationalization, removal of non-tariff barriers, mutual recognition of standards, enhanced technology cooperation, resilient supply chains, and expanded market access—opens significant new opportunities for Indian MSMEs to integrate into global value chains, scale exports, and adopt advanced technologies.”

“We are confident that the proposed pathway towards a comprehensive BTA, along with commitments on ease of compliance and digital trade, will strengthen the competitiveness, innovation capacity, and global presence of India’s MSME sector,” it added.

Tariff Provisions

Under the framework, the US will apply a reciprocal tariff rate of 18 per cent on a range of Indian goods, including textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home décor items, artisanal products and select machinery. 

Subject to the finalisation of the Interim Agreement, tariffs will be eliminated on several products such as generic pharmaceuticals, gems and diamonds, and aircraft parts.

The US will also remove certain national security-related tariffs on Indian aircraft and aircraft parts, while India will receive preferential tariff rate quotas for automotive components and negotiated outcomes on generic pharmaceuticals, pending the conclusion of relevant US investigations.

Indian Commitments and Safeguards

As part of the framework, India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including animal feed, tree nuts, fruits, soybean oil, wine and spirits.

At the same time, India will fully protect sensitive sectors by excluding key agricultural and dairy products such as rice, wheat, maize, soya, milk, poultry, meat, ethanol, tobacco and certain vegetables fr0m tariff concessions, with the stated aim of safeguarding farmers’ interests and rural livelihoods.

Non-Tariff Barriers and Cooperation

Both sides have agreed to address non-tariff barriers affecting bilateral trade. India will work to ease long-standing market access issues related to US medical devices, information and communication technology products, and food and agricultural goods. The framework also includes plans for greater alignment on standards, conformity assessment procedures and rules of origin.

Next Steps

The framework includes commitments to strengthen supply chain resilience, enhance cooperation on investment and export controls, and expand digital trade engagement. 

India has indicated its intention to purchase around USD 500 billion worth of US energy products, aircraft, technology goods and other items over the next five years.

The two countries said they would move quickly to implement the framework and work towards finalising the Interim Agreement, with the longer-term objective of concluding a comprehensive and mutually beneficial Bilateral Trade Agreement.

(KNN Bureau)