A historic step toward a full Bilateral Trade Agreement (BTA)
India and the United States have agreed on a framework to boost trade, cut tariffs, open markets, and strengthen supply chains.
Key Highlights
1. Lower Tariffs
- India cuts tariffs on U.S. industrial goods, food & agri items
- U.S. removes tariffs on Indian steel, aluminium, copper, and aircraft parts
- Many products (pharma, gems, diamonds) to get full tariff rollback after final agreement
2. Market Access Improvements
- Easier entry for the US:
- Medical devices
- ICT products
- Agricultural goods
- Acceptance of U.S./international standards under review (6 months)
3. Digital & Technology Boost
- Roadmap for digital trade rules
- Increased trade in GPUs and data-center technologies
- Wider tech collaboration between both countries
4. Supply Chain & Security Alignment
- Joint action on:
- Supply chain resilience
- Investment reviews
- Export controls
- Non-market practices (e.g., China)
5. Major Purchase Commitment
India plans to buy $500 billion worth of U.S. goods over 5 years:
- Energy
- Aircraft
- Precious metals
- Technology products
- Coking coal
6. Rules of Origin & Flexibility
- Benefits reserved for India & U.S.
- If one country changes tariffs, the other can adjust commitments
Impact on Indian Businesses / MSMEs
Opportunities
- Pharma, gems, diamonds, engineering, aviation parts
- Digital services & tech exports
- Electronics & semiconductor supply chains
Challenges
- More competition from U.S. agri & industrial products
- Textiles, apparel, and leather face a temporary 18% U.S. tariff
- Higher compliance is needed for standards/testing
🔗 Source: Press Information Bureau