The White House has announced a landmark trade deal between the United States and India, describing it as a historic agreement that will fling open India's massive market of over 1.4 billion consumers to American products.

This development follows a joint statement issued last Friday, local time in Washington DC, where US President Donald J. Trump outlined the pact's key elements.

The agreement stems from a recent telephone conversation between President Trump and Indian Prime Minister Narendra Modi. During the call, the leaders established a framework for an Interim Agreement on reciprocal trade. They also reaffirmed their dedication to negotiating a broader US-India Bilateral Trade Agreement (BTA).

A significant concession from the US side involves the removal of an additional 25 per cent tariff on imports from India. President Trump signed an Executive Order to this effect last Friday, acknowledging India's pledge to cease purchasing oil from the Russian Federation. In response, the US will reduce its Reciprocal Tariff on India from 25 per cent to 18 per cent.

This move addresses longstanding systemic imbalances in bilateral trade and shared national security concerns, according to the White House. India's alignment with US priorities has paved the way for these tariff adjustments.

Key provisions of the deal require India to eliminate or reduce tariffs on all US industrial goods. This extends to a broad array of American food and agricultural products, such as dried distillers' grains (DDGs), red sorghum, tree nuts, fresh and processed fruits, certain pulses, soybean oil, wine, spirits, and more.

India has further committed to ramping up purchases of American goods. Over the coming years, it pledges to acquire more than USD 500 billion worth of US energy, information and communication technology, agricultural products, coal, and other items.

The agreement mandates India to tackle non-tariff barriers impeding bilateral trade in priority sectors. This aims to smooth the path for American exporters facing historical protectionist hurdles.

Both nations will negotiate rules of origin to ensure that the deal's benefits primarily favour the US and India. This provision guards against third-party exploitation of the concessions.

India has agreed to scrap its digital services taxes. It also commits to forging robust bilateral digital trade rules, tackling discriminatory practices, burdensome barriers, and prohibiting customs duties on electronic transmissions.

Economic security forms another pillar of the pact. The US and India vow to bolster supply chain resilience and innovation by countering non-market policies from third parties. They will cooperate on investment reviews and export controls.

Bilateral trade in technology products will see a sharp increase. Joint cooperation in this area is set to expand significantly, fostering innovation and mutual gains.

The White House statement lambasts India's past trade practices, noting some of the world's highest tariffs against the US. These include an average of 37 per cent on agricultural goods and over 100 per cent on certain automobiles. Non-tariff barriers have long banned or restricted many US exports.

Implementation will move swiftly in the weeks ahead. The US and India aim to finalise the Interim Agreement promptly, while advancing towards a comprehensive BTA.

Future negotiations will cover remaining tariff barriers, additional non-tariff obstacles, technical barriers to trade, customs facilitation, good regulatory practices, trade remedies, services, investment, intellectual property, labour standards, environmental concerns, government procurement, and curbing unfair practices by state-owned enterprises.

This deal aligns with a national emergency declared by President Trump on 2 April 2025. That declaration addressed the persistent US goods trade deficit, driven by non-reciprocal trade relationships, unfair tariffs, non-tariff barriers, and trading partners' policies that suppress domestic wages and consumption.

Through this agreement, President Trump seeks to dismantle tariff and non-tariff barriers worldwide. The focus includes expanding market access for American exporters, particularly in agriculture, to advance US interests.

Based On ANI Report