India–US Interim Trade Framework Set to Boost Exports, Jobs and Economic Cooperation: Piyush Goyal

Feb 2026 : The newly announced interim trade framework between India and the United States marks a major step forward in deepening bilateral economic ties and advancing shared goals of sustainable growth, Commerce and Industry Minister Piyush Goyal said on Saturday. Describing the agreement as a historic milestone, Goyal said it will help both countries remain focused on expanding cooperation in trade, investment and technology, while delivering tangible benefits for businesses, workers and consumers.

India and the US have reached a framework for an Interim Trade Agreement, which paves the way for enhanced market access, tariff relief and the gradual removal of long-standing trade barriers. According to Goyal, the agreement will effectively open access to a $30 trillion US market for Indian exporters, particularly benefiting micro, small and medium enterprises (MSMEs), farmers and fishermen. He said the expected surge in exports would generate lakhs of new employment opportunities, especially for women and youth.

A key highlight of the framework is the US decision to slash reciprocal tariffs on Indian goods to 18 per cent, creating a significant competitive advantage for Indian exporters across several labour-intensive and manufacturing sectors. These include textiles and apparel, leather and footwear, plastics and rubber products, organic chemicals, home décor, artisanal products and select machinery. The uniform tariff rate places India in a stronger position compared to several regional exporters that face higher or more uncertain access to the US market.

The 18 per cent tariff also narrows the gap with European exporters, who face around 15 per cent duties, thereby improving the price competitiveness of Indian goods. This is expected to particularly benefit sectors such as textiles, apparel, leather goods, chemicals and engineering products, where India competes closely with regional and global rivals on cost and scale.

In addition, Goyal said tariffs will be reduced to zero on a wide range of Indian exports, subject to the successful conclusion of the Interim Agreement. These include generic pharmaceuticals, gems and diamonds, and aircraft parts—sectors where India has a strong global presence and where US demand remains high. The zero-duty pathway is expected to significantly enhance India’s export competitiveness and further strengthen the “Make in India” initiative.

India will also receive exemptions under Section 232 of US trade law on aircraft parts, along with a tariff rate quota for auto parts, which are currently subject to national security-related tariffs on automobiles and components. These concessions are expected to deliver tangible gains for India’s engineering, aviation and auto component industries.

At the same time, Goyal emphasized that the agreement firmly safeguards India’s farmers and rural livelihoods. He said all sensitive agricultural and dairy products have been completely protected, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables and meat products. “This balance reflects India’s commitment to growth without compromising the interests of its farming community,” he said, adding that the framework aligns with the vision of Viksit Bharat under Prime Minister Narendra Modi’s leadership.

The interim framework also addresses several non-tariff barriers that have long constrained bilateral trade. India has agreed to work on barriers affecting US medical devices and to eliminate restrictive import licensing requirements that delay or limit market access for US information and communication technology products. Further, India has committed to decide within six months of the agreement taking effect whether US or international standards can be accepted in identified sectors, including testing and certification requirements. Similar commitments apply to food and agricultural products.

Both sides have agreed to establish clearer rules of origin to ensure that the benefits of the agreement accrue primarily to Indian and US producers. They will also hold discussions on standards and conformity assessments to make compliance easier and reduce regulatory uncertainty.

Beyond tariffs, the framework sets the stage for broader commercial engagement. India has outlined plans to purchase $500 billion worth of US goods over the next five years, including energy products, aircraft and aircraft parts, precious metals, technology products and coking coal. Trade in advanced technology products, including graphics processing units used in data centres, is expected to rise, alongside expanded joint technology cooperation.

The framework also includes commitments on digital trade, with both countries agreeing to address discriminatory or burdensome practices and work towards ambitious digital trade rules as part of the eventual full agreement.

The two sides said the interim framework keeps negotiations on track for a comprehensive US–India Bilateral Trade Agreement, first launched by US President Donald Trump and Prime Minister Narendra Modi last February. For India, the agreement represents a combination of tariff relief, improved market access and reduced trade frictions—positioning Indian exporters more strongly in the world’s largest economy while reinforcing a long-term strategic economic partnership between the two democracies.