President Donald Trump announced on Friday the framework of a trade agreement between the United States and India, under which New Delhi will invest $500 billion in American industries over the next five years, and both parties will reduce tariffs.
In a joint statement, the countries’ leaders said the agreement reaffirms the commitment to ongoing Bilateral Trade Agreement negotiations launched in February 2025 and outlines mutual tariff reductions and increased market access across a wide range of goods.
India will invest in U.S. energy products, aircraft materials, precious metals, technology products, and coking coal over the next 5 years. Both nations will increase trade in technology products, such as graphics processing units and other goods used in data centers, and will expand joint technology cooperation.
Under the interim framework, India will also eliminate or reduce tariffs on a broad list of U.S. industrial and agricultural products, including tree nuts, soybean oil, and spirits.
In return, the U.S. will reduce the reciprocal tariff rate from 50% to 18% on many Indian goods, including textiles, leather, machinery, and other products, with plans to remove tariffs on certain items pending full implementation of the agreement.
The statement also includes provisions for preferential market access, cooperation on non-tariff barriers, and commitments to strengthen alignment on economic security and supply chain resilience.
The announcement comes after months of strained trade relations. Last year, the U.S. imposed high tariffs on Indian imports, which sparked disputes that eroded trust and slowed cooperation on other fronts.
The new interim agreement is seen as an effort to mend those tensions by offering Indian exporters greater access to U.S. markets while opening new opportunities for American producers.
TRUMP’S PRAISEWORTHY INDIA TRADE DEAL
When the agreement was announced earlier this week, Indian markets surged, marking their best day since May 2025.
In addition to improving relations with India, the deal also weakens China’s economy, as India has relied heavily on Chinese exports. In another hit to U.S. foes, India also agreed to halt Russian oil purchases.