- Prime Minister Modi welcomed the new interim trade framework with the US as a sign of deepening ties
- The US will apply a reciprocal 18% tariff on Indian goods under the new trade agreement
- The framework enhances market access and tariff relief for Indian exporters in key sectors
Prime Minister Narendra Modi welcomed the new interim trade framework announced by Washington and New Delhi, calling it a reflection of "growing depth, trust and dynamism of our partnership".
PM Modi said the agreement shows US President Donald Trump's "personal commitment to robust ties between our countries", adding that it opens opportunities for farmers, entrepreneurs, MSMEs, start-up innovators, fishermen and more.Under the framework, the United States will apply a reciprocal tariff rate of 18 per cent on Indian goods. The uniform rate gives India an edge over several countries in its neighborhood and the wider region. The framework also opens a path to tariff removal on a wide range of Indian goods.
In a post on X, PM Modi wrote, "It (the agreement) will generate large-scale employment for women and youngsters. India and the United States share a commitment to promoting innovation and this framework will further deepen investment and technology partnerships between us. This framework will also strengthen resilient and trusted supply chains and contribute to global growth."
Great news for India and USA!
— Narendra Modi (@narendramodi) February 7, 2026
We have agreed on a framework for an Interim Trade Agreement between our two great nations. I thank President Trump for his personal commitment to robust ties between our countries.
This framework reflects the growing depth, trust and dynamism of… https://t.co/zs1ZLzamhd
India gained tariff relief, better market access, and a stronger competitive position in the United States under the new interim trade framework.
The 18 per cent tariiff rate helps exporters in textiles, apparel, leather goods, chemicals and engineering items. It also strengthens India's hand against regional rivals competing on cost.
The framework also opens a path to tariff removal on a wide range of Indian goods, including generic pharmaceuticals, gems and diamonds, and aircraft parts. These are sectors where India holds a strong global share and US demand is high.
Washington will also remove tariffs on certain Indian aircraft and aircraft parts and India will receive a preferential tariff rate quota for automotive parts. Outcomes tied to generic drugs and pharmaceutical ingredients will depend on a US Section 232 investigation.
Beyond tariffs, both countries agreed to provide preferential market access in sectors of sustained interest.
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