India and US Finalize First Tranche of Interim Trade Deal

The Government of India and the United States finalized the first tranche of an interim trade agreement following a call between Prime Minister Narendra Modi and President Donald Trump. The deal aims to rationalize tariffs and improve market access for sectors including textiles, gems, jewelry, and aircraft components. The Confederation of All India Traders described the pact as a boon for India's MSME sector, stating it would enable firms to scale production and increase employment for women and youth.

Contradictions emerged regarding agricultural concessions. A White House fact sheet released on February 9 initially claimed India would reduce tariffs on certain pulses, but a revised version issued on February 10 omitted this reference and changed a $500 billion Indian investment commitment in U.S. energy and technology to an intention. Union Commerce Minister Piyush Goyal defended the deal, stating that interests of farmers are 100 percent safeguarded and that no concessions were granted for genetically modified foods, sugar, or tobacco. While Goyal noted that items like lentils and almonds have been imported for years and would see cuts, Agriculture Minister Shivraj Singh Chouhan asserted that pulses would not enter the country.

Despite government assurances, the Samyukt Kisan Morcha farmers group organized protests and a strike on February 12, citing concerns over transparency and the potential impact on domestic producers. In return, the deal reduces reciprocal U.S. tariffs on Indian goods—such as tea, coffee, and spices—to 18 percent as both nations work toward a comprehensive Bilateral Trade Agreement.