Log In Get Started
Commodities February 5, 2026

India, U.S. Set March Target to Finalize Trade Accord; Tariff Reductions and Large U.S. Purchases Planned

Trade minister lays out timeline and purchase commitments, including significant aerospace orders

By Priya Menon
India, U.S. Set March Target to Finalize Trade Accord; Tariff Reductions and Large U.S. Purchases Planned

India and the United States expect to finalize a formal trade agreement in March, Trade Minister Piyush Goyal said, with a joint statement due in four to five days. The pact will see New Delhi cut tariffs on U.S. goods and prompt Washington to lower duties on Indian exports from 50% to 18%. India plans to import at least $500 billion of U.S. goods over the next five years, including energy, aircraft and chips, with potential aircraft orders from companies such as Boeing in the $70-80 billion range - rising above $100 billion if engine purchases are included.

Key Points

  • India and the United States expect to sign a formal trade deal in March, with a joint statement planned in four to five days.
  • Under the agreement, Washington will reduce duties on Indian exports to 18% from 50%, and New Delhi will cut tariffs on U.S. goods.
  • India has committed to importing at least $500 billion of U.S. goods over the next five years, including energy, aircraft and chips; potential Boeing-related orders are estimated at $70-80 billion, rising above $100 billion with engines.

India and the United States are aiming to sign a formal trade agreement in March, Trade Minister Piyush Goyal said on Thursday, providing the first official timeline for adoption since the deal was unveiled earlier in the week.

According to Goyal, the two governments will issue a joint statement within four to five days. That statement is expected to trigger a U.S. decision to cut duties on Indian exports to 18% from the current 50% level, he added.

The trade arrangement was announced as a surprise by President Donald Trump. The administration's version of the deal reduces U.S. tariffs on Indian goods while India agrees to halt purchases of Russian oil and to lower trade barriers, according to the description provided at announcement.

Beyond tariff changes, Goyal quantified the scale of planned purchases from the United States over the coming five years. He said India will import at least $500 billion worth of U.S. products and services, naming energy, aircraft and semiconductor chips among the categories expected to account for the flow of goods.

Goyal also addressed potential aerospace orders. He said commitments from Indian buyers to U.S. planemakers such as Boeing could total between $70 billion and $80 billion. "If you add engines, it will probably cross $100 billion," he said.

These figures and the timetable represent the Indian government's current public articulation of the agreement and its anticipated economic implications. The minister's comments set specific expectations for tariff adjustments and procurement volumes tied to the pact but do not provide further operational detail on implementation steps or sector-specific timelines beyond the procurement categories noted.

The announcement frames a package of reciprocal concessions: reduced U.S. tariffs on Indian products in return for changes in India’s energy sourcing and reductions in market access barriers. The scope of imports India plans from the United States - notably in energy, aerospace and semiconductors - highlights immediate sectors likely to see increased commercial activity if the commitments translate into finalized contracts and deliveries.

For now, the governments intend to move forward with a public joint statement as the next step, followed by the formal signing targeted in March.

Risks

  • Timetable uncertainty - the agreement is expected to be signed in March and a joint statement issued in days, but the article provides no detail on implementation steps or contingency plans, leaving timing and execution uncertain. (Impacts: trade, markets)
  • Procurement and delivery risks - large purchase commitments for energy, aircraft and chips depend on future contracts and deliveries; realization of the $500 billion import figure is contingent on follow-through by buyers and suppliers. (Impacts: aerospace, energy, semiconductor supply chains)
  • Policy conditionality - the deal links tariff reductions with India ceasing purchases of Russian oil and lowering trade barriers; any changes in these political or policy commitments could affect the agreement’s terms. (Impacts: energy, international trade)

More from Commodities

Supreme Court Ruling May Lower Equipment Costs for U.S. Energy Firms but Won’t Likely Shift LNG Trade Flows Feb 20, 2026 U.S. and Iran Move Closer to Military Confrontation as Diplomatic Channels Falter Feb 20, 2026 USDA to Send $12 Billion in One-Time Farm Aid as Officials Warn of Lingering Stress in Agriculture Feb 20, 2026 Cuba Turns to Solar as Fuel Supplies and Power Grid Strain Under U.S. Measures Feb 20, 2026 Citigroup Maps Out Oil Price Paths as U.S.-Iran Tensions Mount Feb 20, 2026