India-US Trade Deal: A Historic Milestone with Far-reaching Impacts

Union Minister of Commerce and Industry Piyush Goyal announced a significant development on Thursday regarding the India-US bilateral trade agreement. The first tranche of the deal is ready, with a corresponding joint statement anticipated within the next four to five days. A formal legal agreement is slated for mid-March, which will pave the way for an executive order from the US to slash tariffs to 18 percent.

Goyal's announcement coincided with the signing of the Terms of Reference for a Free Trade Agreement between India and the Gulf Cooperation Council. He underscored the enormity of the forthcoming engagement with Washington, highlighting planned orders for US aircraft and engines that will surpass USD 100 billion. Commerce Secretary Rajesh Agrawal provided clarity on the differentiation between the two countries' tariff structures, stating that the legal agreement is essential for modifying India's tariffs.

These developments follow a crucial phone call on February 2 between Prime Minister Narendra Modi and US President Donald Trump, leading to the trade deal's declaration. Goyal addressed the Lok Sabha to assure members that key sectors were safeguarded during negotiations, while ensuring maximum mutual benefits. The bilateral trade agreement, first proposed in 2025, aims to elevate current trade levels of USD 191 billion to USD 500 billion by 2030, significantly benefiting sectors such as food processing and petrochemicals.