India Confident of Scaling US Sourcing to $500 Billion as Interim Trade Deal Nears

Commerce and Industry Minister Piyush Goyal has said India sees “no difficulty” in sourcing goods worth up to $500 billion from the United States over time, as New Delhi and Washington move closer to formalising an interim trade agreement that will significantly reduce tariffs on a large share of Indian exports.

In an interview with CNBC-TV18, Goyal said India would increasingly turn to the US as a preferred supplier in high-value and strategic segments, including advanced information and communication technology (ICT) products and GPUs, alongside energy and aircraft imports.
“We already have aircraft and equipment orders worth over $80 billion, and this figure is expected to rise. Energy imports from the US, including coking coal, will also increase substantially,” he said.

The remarks come amid expectations that the White House will issue an executive order next week lowering reciprocal tariffs on Indian goods to 18 per cent. Exporters will be able to avail of the reduced rates from the date the order takes effect. The interim trade deal is expected to be signed by mid-March, with US Trade Representative Jamieson Greer likely to visit New Delhi to finalise the legal text.

Zero-Duty Access for Half of India’s Exports

According to Goyal, nearly 50 per cent of India’s exports to the US will enjoy zero-duty access under the interim framework. Around 35 per cent of exports will attract an 18 per cent tariff, while 10–15 per cent of items—primarily steel and aluminium—will continue to face Section 232 sectoral tariffs, which can be as high as 50 per cent.

“The agreement will be a complete legal document, including zero-duty concessions,” Goyal said, adding that India would raise concerns over Section 232 tariffs during negotiations for a comprehensive bilateral trade agreement (BTA).

‘Red Lines’ Fully Protected

Responding to Opposition criticism, Goyal asserted that India’s “red lines” had been fully safeguarded and accused vested interests of spreading misinformation among farmers.
“All dairy products, poultry, meat, rice, wheat, sugar, soya, corn, millets, bananas, green peas, kabuli chana and all genetically modified products are completely excluded from the trade deal,” he said.

Fruits such as bananas, cherries, strawberries and citrus fruits, along with honey, fuel ethanol and tobacco, have also been kept out of the agreement.

Addressing concerns raised by farmer organisations over soybean oil and distillers dried grains (DDG) imports, Goyal said India was already importing large quantities of soybean oil and that genetically modified characteristics are removed during processing.

On apples, he said domestic growers would remain protected. India imports around 5.5 lakh tonnes of apples annually, and US apples will be subject to a minimum import price of ₹80 per kg plus a ₹20 duty—resulting in a floor price roughly 33 per cent higher than apples sourced from other countries.

Boost for MSMEs and Labour-Intensive Sectors

Labour-intensive industries and micro, small and medium enterprises (MSMEs) are expected to be among the biggest beneficiaries of the deal. Sectors such as textiles, machinery parts, auto components, leather, footwear, sports goods, furniture, handicrafts and handloom products are likely to see immediate gains.

Goyal said exports of farm and fishery products could double from $54 billion to $100 billion, delivering significant benefits to farmers and fishermen.

Products including spices, tea, coffee, cocoa, citrus juices, banana pulp, avocados and shiitake mushrooms will receive zero-duty access. India will also get duty-free treatment for gems and diamonds, clocks and watches, home décor items, and aluminium and zinc oxides.

Russian Oil, Pharmaceuticals and Visas

On reports linking the trade talks to India’s purchases of Russian oil, Goyal clarified that the proposed 25 per cent ad valorem duty related to such imports was not part of the trade deal. “That issue falls under the Ministry of External Affairs. I am not aware of any monitoring mechanism, and I do not deal with it,” he said.

He added that a Section 232 investigation into pharmaceutical generics and ingredients is still pending, but the US has not imposed tariffs on the sector so far. “We have received assurances that generic pharmaceuticals and ingredients will be given zero-duty treatment,” he noted.

H-1B visas were not discussed during the negotiations, Goyal said, adding that Indian industry is not particularly concerned, as the relevance of the visa category has diminished in the post-Covid era with the expansion of remote work.