NEW DELHI: India will eliminate or reduce tariffs on a wide range of US food and agricultural products, a move that is expected to make several American imports cheaper for Indian consumers, according to a joint statement released by India and the United States on Saturday announcing the framework for an interim trade agreement.
Products that are set to see tariff cuts include dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, and wine and spirits. The tariff changes are part of reciprocal commitments outlined in the interim pact aimed at easing trade tensions and improving market access on both sides.
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US tariffs on India cut to 18%; $30 trillion market access – India-US trade deal explained in 10 points“The US and India are pleased to announce that they have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade,” the joint statement said.
Under the framework, the United States will reduce tariffs on Indian goods from 50% to 18%. The higher duties had been imposed after trade talks stalled, with 25% of the tariffs introduced in August when Washington accused New Delhi of supporting Russia’s war efforts against Ukraine through oil purchases.
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India-US trade deal: Read full text of joint statementThe interim agreement also reaffirms the commitment of both countries to continue negotiations on a broader US-India Bilateral Trade Agreement. These talks were launched by Prime Minister Narendra Modi and US President Donald Trump in February 2025 following months of strain in trade ties.
As part of the framework, India has agreed to address long-standing non-tariff barriers affecting US exports, including in medical devices, information and communication technology goods, and food and agricultural products. The two sides also plan to establish rules of origin to ensure trade benefits accrue mainly to India and the United States.
On the US side, Washington will apply a reciprocal tariff rate of 18% on Indian-origin goods, including textiles, apparel, leather and footwear, plastics, chemicals, home décor, artisanal products and certain machinery. Subject to the successful conclusion of the interim agreement, the US has also said it will remove reciprocal tariffs on a wider set of Indian exports, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
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India-US trade deal: What it means for farmers, entrepreneurs and the ‘Make in India’ pushThe framework further includes commitments on easing tariffs on certain aircraft and aircraft parts, cooperation on supply chain resilience, and addressing barriers to digital trade. India has also indicated it intends to purchase $500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years.
Both countries said they will work towards promptly implementing the framework and finalising the interim agreement, with the longer-term objective of concluding a mutually beneficial bilateral trade agreement.
"This interim US-India trade deal should make quite a few American farm products cheaper here in India – things like soybean oil, tree nuts, fresh and processed fruits, dried distillers’ grains and red sorghum for animal feed, and wines and spirits. India is cutting or scrapping tariffs on these and addressing some longstanding non-tariff barriers that have restricted supply," said Suresh Nair, Tax Partner, EY India.
"That should bring retail prices down for premium nuts, fruits, wines, and particularly soybean oil, making them more accessible to middle-class households and potentially easing input costs for food processors and the livestock sector. On the energy side, the agreement doesn’t alter tariffs on oil or energy imports directly, but India’s stated intent to purchase $500 billion worth of US energy products (among other items) over the next five years should lead to larger, steadier volumes coming in, which could help stabilise supply and support more competitive pricing in the longer term, though retail fuel prices will still be influenced by global markets and domestic policies," Nair added.