New Delhi: India Friday agreed to eliminate or reduce tariffs on all American industrial goods and a wide range of agricultural products as part of an interim trade deal with the US, even as questions remained over New Delhi’s commitment to stop purchasing Russian crude oil.
In exchange for tariff reductions, India’s exports to the US will face an 18 percent duty, down from the 25 percent levied before this, and eliminate the additional 25 percent slapped as punitive tariffs. Washington will also remove reciprocal tariffs imposed on gems and jewellery, aircraft parts and generic pharmaceuticals through an executive order, some of which have been in place since 2018.
The joint statement issued by both countries Friday outlined the broad contours of the agreement, which follows a political understanding announced by Prime Minister Narendra Modi and US President Donald Trump on 2 February. Both nations also committed to negotiating a broader bilateral trade agreement.
The framework comes after nearly a year of negotiations that stalled over India’s purchases of Russian oil and challenges over opening the country’s agricultural sector. The Trump administration had imposed 50 percent tariffs on Indian imports—25 percent as reciprocal duties and 25 percent as a penalty for Russian oil purchases.
On Friday, the US issued a modified executive order removing the 25 percent punitive tariffs imposed on India due to its purchases of Russian oil, effective for all imports of Indian goods from 7 February.
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Tariff structure
“India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products,” the joint statement said.
The US will apply a reciprocal tariff rate of 18 percent under Executive Order 14257 of 2 April 2025 on originating goods from India, including textiles and apparel, leather and footwear, plastic and rubber, organic chemicals, home décor, artisanal products and certain machinery. The executive order is titled ‘Regulating Imports With a Reciprocal Tariff to Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits’.
Washington has also agreed to remove higher tariffs on certain aircraft and aircraft parts that were imposed to “eliminate threats to national security” under presidential proclamations announced in March 2018 and July 2025.
India will receive a preferential tariff rate quota for automotive parts and, depending on the outcomes of ongoing Section 232 investigations, will receive a “negotiated” rate for generic pharmaceuticals.
Section 232 investigations are initiated by the US Secretary of Commerce to determine the impact on “national security” through the imports of specific goods. The provision refers to a section in the Trade Expansion Act of 1962 under US law. The findings allow the President to issue proclamations to adjust the imports of goods investigated under Section 232.
The US in April 2025 launched such an investigation into the imports of pharmaceuticals and pharmaceutical ingredients. It currently has 11 ongoing investigations under Section 232, including into imports of timber and lumber, heavy duty trucks, medical devices, wind turbines, unmanned aircraft systems, commercial aircrafts and jet engines, semiconductors and processed critical minerals.
Sensitive sectors protected
Indian commerce and industry minister Piyush Goyal made it clear that no concessions have been made in sensitive areas of agricultural goods, including grains, frozen vegetables, vegetables, spices, oilseeds, dairy, poultry and meat products.
Beans and pulses such as Kabuli chana, green peas, root vegetables such as sweet potatoes, and dried vegetables like onions, mushrooms, potatoes, dried garlic and other dried vegetable mixtures are all outside the scope of the deal.
“Additionally, tariffs will go down to zero on a wide range of goods, including generic pharmaceuticals, gems & diamonds, and aircraft parts, thereby further enhancing India’s export competitiveness and Make in India,” Goyal said in a statement on the social media platform X.
PM Modi welcomed the framework, calling it a reflection of the “growing depth, trust and dynamism of our partnership”.
Modi and Trump announced their intention to launch talks for a bilateral trade agreement on 13 February 2025. However, discussions stalled for most of last year over Indian purchases of Russian oil and challenges over negotiations in opening India’s agricultural sectors.
Russian oil question
One of the more contentious claims made by Trump is that India has “committed” to stop purchasing crude from Russia. The punitive tariffs imposed by the US at the end of August 2025 were linked directly to New Delhi’s large purchases of Russian oil.
In the modified executive order announced Friday, Trump said: “Specifically, India has committed to stop directly or indirectly importing Russian Federation oil, has represented that it will purchase United States energy products from the United States, and has recently committed to a framework with the United States to expand defence cooperation over the next 10 years.”
India has maintained that it is keen to “diversify” its energy sources but remains directed by market dynamics on sourcing of energy goods. There is no clarity from the Indian side so far on whether there has been a political commitment to stop the purchase of Russian oil. Russia was India’s largest source of crude in 2024-2025, with Indian firms importing roughly $56 billion worth of oil from Moscow.
New Delhi has also agreed to purchase $500 billion worth of energy products, aircraft and aircraft parts, precious metals, technology products and coking coal from the US over the next five years as part of its commitment to Washington to secure the deal.
In the 2024-2025 financial year, Indian imports from the US stood at roughly $45 billion, according to data published by the ministry of commerce and industry. India’s imports from the US till November 2025 stood at $46 billion, indicating growth in merchandise imports from the North American nation.
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