India-US Trade Deal Update: 25% Tariff Cut To 18% Soon As Legal Draft Enters Final Stage

India and the United States are in the final stages of concluding an interim trade agreement. Joint Secretary in the Commerce Ministry and India’s chief negotiator, Darpan Jain, will travel to the US next week to finalise the legal draft of the interim trade pact. The move follows the joint statement issued on February 7 between the two countries.

Commerce Secretary Rajesh Agrawal shared this update on Monday, noting that the visit aims to convert the agreed framework into a binding legal agreement.

Legal Draft of Framework Deal Underway

According to Agrawal, the February 7 joint statement formed part of a broader framework deal mutually agreed upon by India and the US. The statement outlined the structure of the proposed trade arrangement. Both sides are now working to transform that framework into a formal legal document that will be signed by the two countries.

He said efforts are underway to complete the legal formalities, with the goal of signing the agreement by March. However, no specific date has been confirmed, as certain legal issues still need to be resolved.

Darpan Jain and his team are expected to engage with US officials next week to finalise the draft. The visit is intended to address any pending concerns and expedite the process.

Tariff Reductions Under Discussion

Agrawal also revealed that the US is preparing to reduce the 25 per cent reciprocal tariff imposed on Indian goods to 18 per cent. This reduction is expected to be implemented as early as this week.

He further stated that the additional 25 per cent tariff imposed on Indian goods from August 27 has already been withdrawn. That levy had been introduced as a punitive measure linked to India’s purchase of crude oil from Russia.

The remaining 25 per cent reciprocal tariff is now under consideration for reduction to 18 per cent. If there is any delay in the decision, the Indian delegation will seek clarity during their US visit next week.

Zero Tariff and Market Access After Formal Signing

Agrawal clarified that certain products could see reciprocal tariffs reduced to zero. However, such measures will only take effect once the legal agreement is formally signed by both nations.

Similarly, any tariff cuts, expanded market access, or concessions from India’s side will be implemented only after the agreement becomes official.

What Did India-US Say On Feb 7?

On February 7, India and the US moved significantly closer to an interim trade agreement. The joint statement issued that day indicated that US tariffs on Indian goods would be reduced from 50 per cent to 18 per cent. It also mentioned zero duty on select products, steps toward greater market access, and measures to strengthen economic ties between the two nations.

The development followed nearly a year of negotiations.

Commerce Minister Piyush Goyal had described the understanding as a “historic and balanced agreement.” Addressing a press conference on February 7, he said the deal would open new opportunities for Indian exports in the $30 trillion US market.

He added that small and medium industries, farmers, fishermen, youth, women, and skilled professionals across the country would benefit significantly from the agreement.