What Happened
- Leaders of India and the US reaffirmed their commitment to a mutually beneficial, balanced trade relationship ensuring benefits for exporters and workers in both countries.
- A White House fact sheet outlined the framework for an Interim Agreement, with both countries working to finalize it in the coming weeks.
- The US reduced reciprocal tariffs on India from 50% to 18%, while India committed to tariff reductions on US industrial goods, agricultural products (dried distillers' grains, red sorghum, tree nuts, soybean oil, wine and spirits), medical devices, and communications equipment.
- The framework addresses ongoing trade irritants including non-tariff barriers, digital trade rules, government procurement, and services market access.
- The White House revised its official fact sheet within 24 hours, removing several specific commitments originally attributed to India, including claims about digital tax elimination and pulses market access.
Static Topic Bridges
India-US Strategic Partnership and Trade Mechanisms
India-US relations have been elevated through multiple institutional frameworks since the 2005 India-US Civil Nuclear Agreement and the 2016 designation of India as a "Major Defence Partner." The trade relationship is managed through the India-US Trade Policy Forum (TPF), re-established in November 2021 after a four-year hiatus.
- India-US Trade Policy Forum (TPF): ministerial-level mechanism, co-chaired by India's Commerce Minister and the US Trade Representative (USTR), with five working groups — agriculture, investment, services and ICT, tariff and non-tariff barriers, and intellectual property.
- India-US Commercial Dialogue (2015): focuses on business-to-business engagement, ease of doing business, and regulatory cooperation.
- India-US CEO Forum: private sector advisory body to both governments on trade and economic issues.
- India-US 2+2 Ministerial Dialogue (since 2018): Foreign and Defence Ministers from both countries; complemented by trade consultations.
- Key foundational agreements: LEMOA (2016), COMCASA (2018), BECA (2020), and iCET (Initiative on Critical and Emerging Technology, 2023).
Connection to this news: The Joint Statement and trade framework build on the institutional architecture of the India-US partnership, with the Trade Policy Forum's working groups providing the negotiating structure for the remaining issues to be resolved in the BTA.
WTO Dispute Settlement and the Appellate Body Crisis
The World Trade Organization's Dispute Settlement Body (DSB) resolves trade disputes through a two-tier system: panel proceedings and Appellate Body review. Since December 2019, the Appellate Body has been non-functional because the US has blocked the appointment of new members, reducing it below the three-member quorum required to hear appeals.
- WTO Dispute Settlement Understanding (DSU): established under the Marrakesh Agreement (1994); 600+ disputes filed since 1995.
- Appellate Body: seven members, serving four-year terms; requires three members for any appeal. Reduced to zero members since December 2019.
- Multi-Party Interim Appeal Arbitration (MPIA): established by 52+ WTO members (not including the US or India) as an alternative appeal mechanism under DSU Article 25.
- Key India-related WTO disputes: India-US Solar Cells (DS456, 2016 — India lost), India-Agricultural Products (DS430, 2015 — India lost on poultry import ban), India-Sugar and Sugarcane (DS580, 2019 — Brazil challenge).
Connection to this news: The bilateral India-US trade framework reflects the broader shift from multilateral (WTO) to bilateral trade governance, partly driven by the non-functional Appellate Body. Both India and the US have opted for direct bilateral negotiations rather than WTO dispute resolution to address trade frictions.
Government Procurement and India's Position
Government procurement refers to the purchase of goods and services by government entities. The WTO's Government Procurement Agreement (GPA) is a plurilateral agreement that opens government procurement markets to international competition, but India is not a member.
- WTO GPA: 48 parties (covering most developed nations); India has observer status since 2010 but has not acceded.
- India's concerns about GPA accession: impact on preferential procurement policies for MSMEs, reservation for SC/ST enterprises, Public Procurement (Preference to Make in India) Order 2017.
- India's Public Procurement Policy: General Financial Rules (GFR) 2017, preference to Make in India products with minimum local content, price preference mechanism.
- Government procurement constitutes approximately 20-25% of GDP in major economies, making it a significant market access issue in trade negotiations.
Connection to this news: Government procurement is listed as a key area for BTA negotiations. India's position outside the WTO GPA framework means any commitments on government procurement market access in the bilateral deal would be a significant shift in India's trade policy stance.
Key Facts & Data
- US reciprocal tariff on India: reduced from 50% to 18%
- India-US bilateral trade (FY2024-25): $131.84 billion
- India's trade surplus with US: approximately $41.18 billion
- India's rank as US trading partner: among top 10; US is India's largest trading partner for four consecutive years
- WTO Appellate Body: non-functional since December 2019
- India's WTO GPA status: observer since 2010, not a member
- White House fact sheet: revised within 24 hours of publication (February 9-10, 2026)
- BTA negotiation areas: services, investment, labour standards, government procurement, digital trade, supply chain resilience