India to Buy $500 Billion of US Goods in Five Years as New Trade Deal Cuts Tariffs

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India to Buy $500 Billion of US Goods in Five Years as New Trade Deal Cuts Tariffs

India plans to purchase $500 billion worth of US goods over five years under a new interim trade framework that lowers tariffs, expands tech cooperation, and resets bilateral trade ties.

Published by Priti | February 07, 2026

India has lined up purchases worth nearly $500 billion of American goods over the next five years as part of a new interim trade framework agreed with the United States, marking a major reset in bilateral trade relations.

The plan, outlined in a joint statement released by New Delhi and Washington, covers a wide range of sectors including energy, aircraft and aircraft parts, precious metals, technology products, and coking coal. The large-scale buying commitment is expected to anchor the interim trade agreement and pave the way for a comprehensive India–US Bilateral Trade Agreement (BTA).

Under the proposed framework, the United States will lower its reciprocal tariff rate on Indian exports to 18 percent, providing significant relief to Indian manufacturers and exporters after months of tariff-related friction. In return, India has agreed to reduce or eliminate tariffs on all US industrial goods and a broad basket of agricultural products.

Both sides also committed to expanding cooperation in advanced technology sectors. This includes increased trade in graphics processing units (GPUs) and other data-centre equipment, along with deeper collaboration in critical and emerging technologies seen as vital to future supply chains.

The framework further addresses digital trade, with India and the US pledging to tackle discriminatory or burdensome practices and work toward robust, ambitious, and mutually beneficial digital trade rules as part of the final BTA.

On market access, India will cut tariffs on US products such as dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine, and spirits. In exchange, the US will remove duties on select Indian exports, including generic pharmaceuticals, gems and diamonds, and aircraft parts, subject to finalisation of the deal.

Officials from both countries said the interim framework would be implemented swiftly, keeping the longer-term objective of a full bilateral trade agreement firmly in focus.