US and India strike interim trade deal to slash tariffs on vehicles and spirits

Harley-Davidsons get cheaper in India, while US markets open wider for Indian exports. But will Russia's oil shadow the deal's success?

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2026 March 13 . 1:03 AM

1 min read

The image shows a poster with a map of India in the center, surrounded by text and a logo. The text reads "India saw the greatest increase in 24.9%".

US and India strike interim trade deal to slash tariffs on vehicles and spirits

India and the US have agreed on a framework for an Interim Trade Agreement aimed at boosting reciprocal trade. The deal includes significant cuts to import duties on several key products, including vehicles, wines, and spirits. Both nations expect the agreement to strengthen economic ties over the coming years.

Under the new trade framework, India will scrap duties on Harley Davidson motorcycles from the US with engine capacities between 800cc and 1,600cc. Over the next decade, these duties will gradually fall to 30%. Other high-end US bikes will also receive reduced tariffs.

Import duties on large American cars will drop as well. Diesel vehicles above 2,500cc and petrol cars over 3,000cc will see their current 66% tariff cut to 50% once the deal is signed. The agreement also includes lower duties on US wines and spirits, though not as low as those granted to the European Union. The US has already removed tariffs on $40 billion of Indian exports. After the deal is finalised, duties on another $86.5 billion of Indian goods will be lowered, with $30 billion already seeing a reduction to 18%. India has also committed to purchasing $500 billion worth of US energy products, aircraft, technology, and other goods over the next five years. However, the US will continue monitoring India's oil imports from Russia. If India resumes such purchases, additional tariffs could be imposed.

The trade agreement will reduce costs for exporters on both sides while expanding market access. Indian buyers will benefit from lower prices on American vehicles, wines, and spirits. Meanwhile, US industries stand to gain from increased sales to India, particularly in energy and technology sectors.