At first glance, the India–US framework for an Interim Agreement reads like a conventional tariff-for-tariff deal. A closer look at the fine print, however, shows a carefully hedged document—one that prioritises legal durability, strategic signalling and negotiating leverage over irreversible commitments.
1. Why section 232 is the real win?
The most meaningful concession in the framework comes under Section 232 of US trade law. Unlike reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA), Section 232 measures are not exposed to the ongoing US Supreme Court case that could restrict President Donald Trump's authority to impose emergency-based tariffs.
That distinction matters. The Trump administration had stretched tariff powers beyond reciprocal duties into national security-based Section 232 tariffs covering steel, aluminium and downstream sectors. By agreeing to remove certain Section 232 tariffs on Indian aircraft and aircraft parts, linked to steel, aluminium and copper, the US is offering relief that is legally insulated from potential judicial reversal. In trade terms, this is more durable than any promise to roll back reciprocal tariffs later.
India also secures a preferential tariff-rate quota for auto parts under US national security rules.
Pharmaceutical tariffs, however, are explicitly carved out and remain hostage to an ongoing Section 232 probe—an important reminder that nothing in this framework pre-empts future US national security claims.
2. Relief—but only after performance
The fine print makes clear that Indian exports will initially face an 18% reciprocal tariff rate under existing US executive orders. These tariffs cover politically sensitive, labour-intensive sectors such as textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home décor, artisanal goods and certain machinery.
Tariff relief on major Indian exports such as gems and diamonds, aircraft parts come only after the successful conclusion of the interim deal. In other words, the US is front-loading leverage and back-loading relief.
3. India's tariff cuts are broad
India's commitments are expansive and clearly spelled out. New Delhi has agreed to eliminate or reduce tariffs on all US industrial goods and on a wide range of US food and agricultural products, including Distillers Dried Grains with Solubles (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits.
This is not just a tariff deal. India also commits to addressing long-standing non-tariff barriers affecting US medical devices, Information and Communication Technology goods and agricultural imports. The promise to review acceptance of US or international standards and testing rules within six months is especially consequential, as regulatory alignment often determines real market access more than headline tariff rates.
4. "Intends to Purchase" is not a binding promise
The most eye-catching figure in the framework, India's stated intention to purchase $500 billion of US goods over five years, is carefully qualified. The language uses "intends", not "commits", and is explicitly tied to tariff stability.
The clause allowing either side to modify its commitments if agreed tariffs change effectively converts the $500 billion figure into a political signal rather than a contractual obligation. It is designed to reassure US stakeholders and markets, not to lock India into fixed procurement targets.
5. The relevance of the rebalancing clause
Buried in the framework is a critical safeguard—if either country alters the agreed tariff structure, the other may revise its commitments. This rebalancing clause ensures flexibility but also introduces uncertainty.
Read carefully, it means that almost every concession in the document is conditional. The framework prioritises optionality over finality. Then that is an approach consistent with an interim agreement meant to keep negotiations moving rather than conclude them.
6. Technology and data centres
The framework's technology language aligns closely with India's domestic policy choices. With India announcing a tax holiday for data centres, the joint statement's commitment to significantly increase trade in technology products—especially GPUs and other data-centre inputs—signals a convergence of industrial strategy rather than a standalone trade concession.
Similarly, the pledge to work toward robust digital trade rules under a future Bilateral Trade Agreement (BTA) should be read as directional, not definitive. It sets the negotiating agenda without pre-judging outcomes on data governance or regulatory sovereignty.
7. Economic security subtext
Finally, the repeated references to supply chain resilience, non-market policies of third countries, investment reviews and export controls reveal the framework’s strategic core. This is as much about aligning against external risks as it is about lowering tariffs.
The Interim Agreement framework is less a finished deal than a managed pause in trade friction. Durable gains are concentrated where legal risk is lowest, most notably under Section 232, while big-ticket promises remain conditional, reversible and tied to future negotiations.