India and the United States unveiled a framework for an interim trade agreement on Friday that promises to reduce tariffs and deepen economic ties between the world’s largest democracies, though not without controversy at home, according to AP.
The deal comes six months after President Donald Trump slapped steep 25 percent tariffs on Indian goods, pressuring New Delhi to abandon its dependence on discounted Russian oil. Under the new arrangement, those tariffs will drop to 18 percent immediately, with Trump signing an executive order Friday to revoke the punitive measures entirely.
In exchange, India has agreed to halt Russian crude purchases and “eliminate or reduce tariffs” on American industrial goods, food, and agricultural products. Trump claimed India would eventually reduce import taxes on US goods to zero and purchase $500 billion worth of American products over five years, an ambitious target designed to unlock greater market access for American exporters.
Prime Minister Narendra Modi praised the agreement as evidence of “growing depth, trust and dynamism” in the bilateral partnership, thanking Trump for his “personal commitment to robust ties.” Indian Trade Minister Piyush Goyal championed the deal’s potential, predicting it would create hundreds of thousands of jobs by opening the “$30 trillion” American market to Indian exporters. He noted that tariffs on pharmaceuticals, gems, diamonds, and aircraft parts would fall to zero, boosting India’s competitive edge.
Yet the framework has ignited fierce criticism from India’s opposition parties, who argue it disproportionately favors Washington and threatens sensitive sectors like agriculture and dairy industries that employ vast swaths of India’s population. Historically, New Delhi has fiercely resisted opening these markets to foreign competition.
Goyal defended the agreement, insisting it protects “sensitive agricultural and dairy products” including maize, wheat, rice, and certain vegetables.
Both nations described the framework as “reciprocal and mutually beneficial,” pledging to pursue a comprehensive trade deal that strengthens supply chains. However, additional negotiations will be required to finalize the arrangement.
The agreement marks India’s latest embrace of global trade liberalization. New Delhi recently concluded a landmark free trade deal with the European Union and signed economic partnerships with Oman and New Zealand, signaling its determination to expand international commerce even amid domestic political tensions.
