US ends 25% India tariffs linked to Russian oil:Opens ₹30 lakh crore market for Indian exporters, interim trade framework in 10 key points

India and the United States on Friday unveiled a framework for an interim trade agreement, alongside a major tariff rollback by Washington that removes the additional 25 per cent duty imposed on Indian imports last year. The move follows commitments by New Delhi on energy sourcing, defence cooperation, and broader alignment with US national security priorities, as both countries advance negotiations on a comprehensive India-US Bilateral Trade Agreement (BTA) launched in February 2025 by President Donald Trump and Prime Minister Narendra Modi. The White House confirmed that the additional tariff, imposed in August 2025 over India’s purchase of Russian oil, will be terminated effective 12:01 am Eastern Standard Time on February 7, 2026 i.e 10:30 am Indian Standard Time. Why the tariff rollback matters The US administration said the decision came after reviewing fresh information and recommendations from senior officials, noting that India had committed to halt direct or indirect imports of Russian oil and expand purchases of American energy products. Washington also cited India’s agreement to deepen defence cooperation with the US over the next decade as a key factor behind the decision. “After considering the information and recommendations these officials have provided to me, among other things, I have determined that India has taken significant steps to address the national emergency,” the executive order said, describing the tariff modification as “necessary and appropriate.” Refunds for duties already collected will be processed under US law and standard Customs and Border Protection procedures. However, the US said it would continue to monitor India’s compliance and could reconsider the tariff if Russian oil imports resume. Here are the 10 key takeaways from the India-US interim trade framework: 1. Tariffs on Indian goods set at 18%:
The United States will apply a reciprocal tariff rate of 18% on several Indian exports, including textiles, leather, chemicals, plastics, machinery, home décor, and artisanal products, significantly lower than previously proposed levels. 2. Pathway to remove tariffs on key sectors:
Washington may remove reciprocal tariffs on products such as generic pharmaceuticals, gems and diamonds, and aircraft parts once the interim agreement is successfully finalised. 3. India to cut duties on US goods:
India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of agricultural products, including tree nuts, fruits, soybean oil, wine, spirits, dried distillers’ grains, and animal feed. 4. $500 billion trade and purchase plan:
India intends to purchase $500 billion worth of US energy products, aircraft and parts, precious metals, coking coal, and technology goods over the next five years, a move expected to significantly boost bilateral trade. 5. Preferential market access for both sides:
Both countries have committed to providing sustained preferential market access in sectors of mutual interest, reinforcing a more reciprocal trading relationship. 6. Relief on aircraft and auto components:
The US will remove certain national security tariffs on Indian aircraft and aircraft parts. India is also expected to receive a preferential tariff-rate quota for automotive parts, subject to US security requirements. 7. Focus on pharmaceuticals:
India could secure negotiated outcomes for generic drugs and pharmaceutical ingredients depending on the findings of an ongoing US Section 232 investigation. 8. Tackling non-tariff barriers:
India has agreed to address long-standing regulatory hurdles affecting US medical devices, simplify restrictive import licensing for information and communication technology goods, and review standards to ease American exports. Both sides will also work to resolve barriers impacting US agricultural trade. 9. Stronger supply chains and tech cooperation:
New Delhi and Washington plan to deepen cooperation in advanced technology, including graphics processing units (GPUs) and data centre equipment, while aligning policies to enhance economic security and supply chain resilience. 10. Roadmap for a full trade pact:
The interim agreement is designed as a stepping stone toward a comprehensive Bilateral Trade Agreement. Both nations will establish rules of origin, align standards, address digital trade barriers, and expand market opportunities during the next phase of negotiations. ‘Framework opens $30 trillion market’ Union Commerce Minister Piyush Goyal welcomed the development, stating that the agreement would open access to a $30 trillion market for Indian exporters and deliver significant benefits to farmers, fishermen, and micro, small, and medium enterprises (MSMEs). “Under the decisive leadership of PM Narendra Modi, India has reached a framework for an Interim Agreement with the US,” Goyal said in a post on X, adding that higher exports would generate “lakhs of new job opportunities for our women and youth.” He stated that the framework safeguards India’s farmers and rural livelihoods by fully protecting sensitive agricultural and dairy sectors, including rice, wheat, maize, milk, poultry, soy, fuel ethanol, cheese, tobacco, certain vegetables, and meat. Russia oil angle and global response Earlier, the Kremlin said India was free to source oil from any supplier. “India has always purchased these products from other countries. Therefore, we see nothing new here,” Kremlin spokesperson Dmitry Peskov said. Both New Delhi and Washington said they would move quickly to implement the framework and finalise the interim agreement, with the ultimate goal of concluding a comprehensive Bilateral Trade Agreement under the agreed roadmap.