White House Unveils Details of 'Historic' US-India Interim Trade Agreement
The White House has officially released a comprehensive fact sheet outlining the key terms of what it describes as a 'historic' interim trade agreement between the United States and India. This development follows the announcement made on Friday, February 10, 2026, where leaders from both nations established a framework for reciprocal trade and reaffirmed their dedication to negotiating a broader Bilateral Trade Agreement (BTA).
Framework and Immediate Tariff Actions
On Friday, US President Donald Trump and Indian Prime Minister Narendra Modi reached a consensus on the framework for an Interim Agreement focused on reciprocal trade. As part of this agreement, President Trump has agreed to remove the additional 25 percent tariff imposed on imports from India. This decision is in recognition of India's commitment to cease purchasing Russian oil. The withdrawal of this penalty tariff became effective at 12:01 am EST on February 7, 2026, which corresponds to 10:31 am IST.
Furthermore, the US administration has committed to lowering its tariffs on Indian goods from 25 percent to 18 percent. This move is significant given that India has historically maintained some of the highest tariffs on US products, with agricultural goods facing an average tariff as high as 37 percent.
Key Terms of the US-India Trade Deal
The fact sheet released by the US government details several critical components of the interim agreement:
- Tariff Reductions by India: India will eliminate or substantially reduce tariffs on a wide array of imports from the United States. This includes all industrial products and numerous US food and agricultural items such as dried distillers' grains (DDGs), red sorghum, tree nuts, fresh and processed fruits, specific pulses, soybean oil, wine, and spirits.
- Increased Purchases by India: India has agreed to significantly boost its purchases of goods from the United States, encompassing energy, technology, agricultural products, coal, and other items. The total value of these purchases is projected to exceed $500 billion.
- Addressing Non-Tariff Barriers: India will work to resolve non-tariff barriers that have been impacting bilateral trade in priority sectors, facilitating smoother trade flows between the two nations.
- Rules of Origin Negotiations: Both countries will engage in negotiations to establish rules of origin. These rules are designed to ensure that the benefits of the trade agreement primarily accrue to the United States and India, preventing third-party exploitation.
- Digital Trade and Services: India will eliminate its taxes on digital services and collaborate with the United States to develop robust rules for digital trade. This initiative aims to address discriminatory or burdensome practices and other barriers, including prohibitions on customs duties for electronic transmissions.
- Enhanced Economic Security Cooperation: The United States and India will strengthen their collaboration on economic security. This includes efforts to fortify supply chains, support innovation, and coordinate actions to counter non-market policies from third parties. Additionally, both nations will cooperate on inbound and outbound investment reviews and export controls.
- Expansion of Technology Trade: Both countries are committed to expanding trade in technology products and enhancing joint technology cooperation, fostering innovation and economic growth.
Broader Implications and Future Negotiations
This interim agreement marks a pivotal step in US-India trade relations, addressing long-standing issues such as high tariffs and trade barriers. The commitment to a broader Bilateral Trade Agreement (BTA) indicates that both nations are poised to deepen their economic partnership further. The reduction in tariffs and the focus on digital trade and economic security reflect a modern approach to international commerce, aligning with global economic trends.
The White House fact sheet underscores the strategic importance of this deal, not only in terms of immediate economic benefits but also in strengthening the bilateral relationship between two of the world's largest democracies. As negotiations for the comprehensive BTA progress, stakeholders will be closely monitoring the implementation of these terms and their impact on trade volumes and economic cooperation.
