White House issues factsheet outlining terms of interim trade deal with India

New York/Washington: The United States has laid out the details of a new interim trade framework with India that could reshape economic ties between the two countries, offering immediate tariff relief from Washington while securing significant commitments from New Delhi on market access, digital trade, and economic security. The specifics of the arrangement were made public in a factsheet issued by the White House on Monday, days after President Donald Trump and Prime Minister Narendra Modi announced a framework for a temporary agreement aimed at paving the way for a broader US-India Bilateral Trade Agreement.

The White House described the deal as a step toward more “balanced and reciprocal” trade, arguing that India has long maintained some of the highest tariffs on American goods among major economies. According to the US factsheet, Indian tariffs on American agricultural products have averaged as high as 37 per cent, while duties on certain automobiles have exceeded 100 per cent. The document also accused India of historically imposing strict non-tariff barriers that have blocked or restricted several US exports.

The interim framework was announced following a call between Trump and Modi last week, during which both leaders reaffirmed their commitment to deeper bilateral trade negotiations. The White House said that in the coming weeks, both governments will work toward finalising the interim agreement while continuing talks on more complex issues such as services, investment, labour standards, and government procurement.

One of the most immediate changes comes from the US side. Trump signed an executive order last Friday withdrawing an additional 25 per cent tariff that had been imposed on Indian imports. The removal took effect at 12.01 am Eastern Standard Time on February 7, which is 10.31 am Indian Standard Time. The White House said this decision was made in recognition of India’s commitment to stop purchasing Russian oil. In a further move, Washington agreed to lower its reciprocal tariff on India from 25 per cent to 18 per cent, citing India’s willingness to address what the US views as systemic trade imbalances and shared security concerns.

In return, India has committed to eliminate or reduce tariffs on all US industrial goods and a broad range of American food and agricultural products. According to the White House, this includes dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruit, certain pulses, soybean oil, wine, spirits, and additional products to be specified later. US officials portrayed this as a major opening of the Indian market, which serves more than 1.4 billion people.

India has also agreed to significantly increase its purchases from the United States. The White House factsheet said New Delhi has committed to buying more than USD 500 billion worth of American goods, including energy, information and communication technology products, agricultural commodities, coal, and other items. The document did not provide a detailed timeline for these purchases, but described them as a central element of the agreement.

Beyond tariffs, the framework addresses structural barriers that have long complicated US-India trade. India pledged to tackle priority non-tariff barriers affecting American exports, while both sides agreed to negotiate rules of origin to ensure that the benefits of the deal primarily accrue to the United States and India rather than third countries.

Digital trade is another key component of the agreement. India committed to removing its digital services taxes and working with Washington to develop strong bilateral digital trade rules. These are expected to prevent discriminatory or overly burdensome practices and to prohibit customs duties on electronic transmissions.

Economic security also features prominently in the framework. The United States and India agreed to deepen cooperation to strengthen supply chains, support innovation, and coordinate responses to what they described as non-market policies from third countries. This includes closer collaboration on investment screening, export controls, and technology trade, as well as expanding joint technology cooperation.

The White House characterised the announcement as a “tangible path forward” that reflects Trump’s push for more reciprocal trade. It said the interim deal aligns with the roadmap set out in earlier terms of reference for a full Bilateral Trade Agreement and will guide further negotiations on remaining tariff barriers, technical trade rules, customs procedures, intellectual property protections, environmental standards, and the role of state-owned enterprises.

US officials acknowledged that significant issues remain unresolved. Negotiations are expected to continue on services and investment, labour protections, government procurement rules, and other regulatory matters that have historically been sensitive for both countries. How these talks unfold will determine whether the interim framework evolves into a comprehensive, legally binding trade pact.

Meanwhile, Congress MP Shashi Tharoor on Tuesday mounted a sharp attack on the proposed India–US interim trade arrangement, describing it as a “pre-committed purchase agreement” that, in his view, abandons the basic principle of reciprocity. He also criticised Union ministers S Jaishankar and Piyush Goyal for deflecting questions in Parliament.

Initiating the Budget debate in the Lok Sabha, Tharoor said the government’s assertion that India has secured a better deal than China, Vietnam, or other Asian economies was unconvincing. He argued that while India may have secured tariff cuts of just one or two percentage points, no other East Asian economy had agreed to dilute its trade surplus with the United States through guaranteed purchase commitments.

Pointing to India’s roughly USD 130 billion in bilateral trade with a surplus of about USD 45 billion, Tharoor said New Delhi had nonetheless committed to purchasing USD 500 billion worth of American goods over five years. He warned that this would effectively convert a surplus into a long-term deficit through executive assurances rather than market forces.

He further alleged that the arrangement entailed lowering tariffs, opening agriculture, easing data localisation norms, weakening intellectual-property protections, and redirecting strategic energy imports. Tharoor said Parliament had not been informed how farmers, MSMEs, and domestic industries would be safeguarded.

Linking the issue to the Union Budget, he said key fiscal assumptions rested on undisclosed trade commitments, making the Budget “incomplete” and raising concerns about accountability and transparency.