India is set to cut or eliminate import tariffs on a range of American food and agricultural products under a new interim trade agreement framework announced jointly by New Delhi and Washington. The move is expected to lower prices for several US-origin products in the Indian market while easing bilateral trade tensions that have built up over the past year.
According to the joint statement released on Saturday, tariff reductions will apply to items such as dried distillers’ grains (DDGs), red sorghum used for animal feed, tree nuts, fresh and processed fruits, soybean oil, and wine and spirits. These concessions form part of reciprocal commitments outlined in the interim pact, aimed at improving market access on both sides.
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“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 statement said.
What India will import at lower tariffs?
Tariff reductions on American goods are also set to provide a competitive edge to food products and beverages imported into India. DDGs and red sorghum are key ingredients for the animal feed industry. Reductions on tree nuts and fruits will also be advantageous to food processors. Similarly, wine and spirits are also most likely to be positively impacted by the tariff reductions.
India has also agreed to remove long-standing non-tariff barriers on US exports, especially in the areas of medical devices, ICT products, and food and agriculture products. Rules of origin will be framed between the two countries so that trade benefits accrue mainly to India and the US.
Reciprocal tariff cuts by the US
On its part, Washington will lower tariffs on Indian goods from 50% to 18%, reversing higher duties imposed after earlier negotiations stalled. A portion of those tariffs had been introduced in August after the US accused India of continuing oil purchases from Russia during the Ukraine conflict.
The revised tariff rate will apply to Indian exports including textiles, apparel, leather and footwear, plastics, chemicals, home décor, artisanal products and select machinery. Subject to the successful conclusion of the interim agreement, the US has also indicated it may fully remove reciprocal tariffs on generic pharmaceuticals, gems and diamonds, and aircraft parts.
Path to a broader trade pact
The interim framework reaffirms the commitment to negotiate a full US–India Bilateral Trade Agreement, talks for which were launched by Narendra Modi and Donald Trump in February 2025.
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India has also signalled its intent 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, underscoring the strategic dimension of the trade reset.
Both sides said they would move quickly to implement the framework, with the longer-term goal of finalising a comprehensive and mutually beneficial trade agreement.
