India-US trade deal to cut tariffs to 18% after joint statement: Goyal

India and the US will issue a joint statement in the coming days to seal the first tranche of their trade deal, paving the way for a White House order cutting tariffs on Indian exports to 18 per cent

India and the United States plan to issue a joint statement in the next four to five days, finalising the first tranche of the trade agreement. This will be followed by a White House executive order cutting tariffs on Indian exports to the US to 18 per cent from 50 per cent, Commerce and Industry Minister Piyush Goyal said on Thursday.

 

When will the formal India-US trade agreement be signed?

 

The joint statement will be followed by the signing of the first tranche of a formal, legal trade agreement between India and the US by mid-March, Goyal told reporters.

 

 

What will the joint statement outline?

 

Discussions between the two countries on the first phase of the deal will be crystallised through the joint statement, which will lay out the mutual understanding reached and share the key elements of the agreement.

 

“Based on the joint statement, a formal agreement will be drafted, which may take a month or a month and a half to finalise. We aim to sign the formal agreement by mid-March,” Goyal told reporters.

 

How will tariff reductions be implemented in India?

 

India will reduce tariffs on products agreed under the trade deal after the formal agreement is signed. The legal agreement will authorise the Indian government to implement tariff elimination and reduction. India’s tariffs are most-favoured nation rates under global trade rules and can be tweaked only after a trade agreement has been formally signed.

 

“We hope to do things fast because there are further concessions that we will get after the legal agreement,” Goyal added.

 

How significant is the deal for India’s trade policy?

 

Once signed, the agreement with the US will be India’s ninth trade deal in the last five years. Negotiations for a trade agreement with the US were launched in March last year.

 

What did President Trump announce on tariffs?

 

After a phone call with Prime Minister Narendra Modi, US President Donald Trump on Monday announced that the much-awaited trade deal with India has been agreed upon and tariffs will be slashed to 18 per cent from 50 per cent. The agreement came over five months after Washington imposed 50 per cent tariffs on several Indian exports, including a 25 per cent punitive duty for India’s purchases of Russian oil.

 

What purchase commitments has India made to the US?

 

Trump had also said that India has committed to “buy American” at a much higher level, including purchases of over $500 billion of US energy, technology, agricultural, coal and other products.

 

India intends to buy goods worth $500 billion from the US over the next five years. This will include purchases across sectors such as oil and gas, aircraft and parts, precious metals and diamonds, and technology products such as high-end chips and server products. It will also include $20 billion worth of technology products used for setting up data centres.

 

“When we estimated what we will need from the US, we came to a figure of at least $500 billion. Our aircraft demand alone — orders placed on Boeing — is nearly $70–80 billion. If you add engines or other spare parts, it will cross $100 billion. Data centres have been given huge concessions in the Budget. If we get $100–150 billion of investment in data centres, we will need equipment for them,” Goyal told reporters.

 

How does this fit into India’s broader import strategy?

 

As per commerce department calculations, India’s current global purchases of these items exceed $300 billion per year and are expected to rise to $2 trillion in the next five years. Procuring $500 billion worth of these items from the US will result in diversification and add resilience to India’s supply chains.

 

Explaining New Delhi’s intent to buy goods worth $500 billion from the US over the next five years, Goyal had told Parliament that India’s ambition to become a developed nation will require capacity expansion in sectors including energy, aviation, data centres and nuclear energy. Since the US is a global leader in these sectors, India will explore trade possibilities that boost both imports and exports.

 

How important is the US market for Indian exports?

 

The US is India’s largest export destination. In FY25, India exported goods worth $86.5 billion to the US, while importing goods worth $45.6 billion.