Under the agreement finalised earlier this week, these tariffs will be brought down to 18 per cent through an executive order issued by the US administration, likely within a day or two after the joint statement is signed.

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India and the United States are likely to sign the first tranche of their long-pending bilateral trade agreement by mid-March, Commerce and Industry Minister Piyush Goyal said on Thursday, signalling a major step forward in economic ties between the two countries.

Addressing reporters in New Delhi, Goyal said a joint statement on the first tranche of the Bilateral Trade Agreement (BTA) is expected to be finalised and signed within the next four to five days. Once the joint statement is signed, import duties imposed by the US on Indian goods will be reduced sharply to 18 per cent from the current 50 per cent.

At present, Indian exports to the US face a total import duty of 50 per cent, which includes a 25 per cent reciprocal tariff and an additional 25 per cent levy linked to India’s purchase of Russian crude oil. Under the agreement finalised earlier this week, these tariffs will be brought down to 18 per cent through an executive order issued by the US administration, likely within a day or two after the joint statement is signed.

Goyal said the formal legal agreement is currently being drafted and may take around a month to six weeks to complete. “It is likely that the formal agreement will be signed by mid-March,” he said, adding that the first phase of the partnership would begin once the joint statement is in place.

Commerce Secretary Rajesh Agrawal clarified that India’s tariff reductions on American goods will come only after the legal agreement is signed. He noted that Indian tariffs are applied on a Most Favoured Nation (MFN) basis, while US import duties are imposed through executive orders.

The minister also clarified that the pact does not include any direct investment commitments. However, he highlighted the scale of future trade and procurement between the two countries, especially in energy, aviation, steel, data centres and information and communication technology (ICT) products.

Goyal said India’s steel production capacity is expected to rise from 140 million tonnes to nearly 300 million tonnes in the coming years, increasing demand for raw materials and equipment. India’s aircraft orders from Boeing alone, including engines and spare parts, are estimated to be worth around USD 100 billion. He also pointed to large data centre investments announced in the Budget, which will drive demand for advanced equipment.

To achieve the bilateral trade target of USD 500 billion set in February 2025, Goyal said India will need to significantly expand both exports and sourcing from the US. Agrawal added that India’s global purchases are projected to touch USD 2 trillion over the next five years, and sourcing USD 500 billion worth of goods from the US would strengthen supply chain diversification and resilience.