The government on Monday claimed the India–US trade agreement marks a major milestone in India’s global trade engagement, securing sustained preferential access for Indian exports in the US market valued at over USD 30 trillion.
The agreement delivers comprehensive tariff rationalisation, zero-duty access across large product categories, enhanced digital and technology cooperation, and a carefully calibrated framework to safeguard India’s farmers, MSMEs, and domestic industry.
With India’s total exports to the US standing at USD 86.35 billion in 2024, the agreement significantly enhances competitive access across key sectors, including textiles, leather, gems and jewellery, agriculture, machinery, home décor, pharmaceuticals, and technology-driven industries.
An official press note explained that the Reciprocal Tariffs (RTs) were earlier as high as 50 per cent on several Indian products. These have now been substantially reduced. Of the total exports, USD 40.96 billion were subject to Reciprocal Tariffs.
Under the agreement, tariffs on USD 30.94 billion of these exports have been reduced from 50 per cent to 18 per cent , while tariffs on another USD 10.03 billion have been reduced from 50 per cent to zero. This means a substantial share of Indian goods entering the US market will now face sharply lower tariffs or completely duty-free access, significantly improving price competitiveness.
Additional structural duty relief ensures zero reciprocal duty access for USD 1.04 billion under the exemption category. Within this, agricultural products valued at USD 1.035 billion have been assured zero Reciprocal Tariffs by the US. This provides stability and predictability for Indian agricultural exporters and ensures that key farm products continue to enjoy uninterrupted market access.
Additional Structural Duty Relief assures zero reciprocal duty for USD 28.30 billion under Section 232 (end-use basis). For these products, additional duties that earlier could go up to 50 per cent have been reduced to zero.
The press note said the agreement creates a clear tariff differential in favour of India. While duties on Indian products have been lowered, several competing suppliers continue to face elevated tariffs in the U.S. market, including China (35 per cent), Vietnam (20 per cent), Bangladesh (20 per cent), Malaysia (19 per cent), Indonesia (19 per cent ), Philippines (19 per cent), Cambodia (19 per cent ) and Thailand (19 per cent ).
This tariff differential significantly enhances India’s price competitiveness, strengthens its relative positioning in the US market and expands export opportunities across labour-intensive industries, manufacturing segments and high-value product categories.
Tariffs on textile exports have been reduced from 50 per cent to 18 per cent, while silk receives 0 per cent duty access, opening enhanced opportunities in the US market valued at USD 113 billion.
Major export categories benefiting from the reduced tariff structure include readymade garments, carpets, man-made textiles, cotton textiles, artificial staple fibres, bedspreads, bleached fabrics, curtains, yarn, baby clothing, bed linen, blankets, gloves and related products.
The agreement is expected to provide a significant boost to the textile sector, leveraging economies of scale and strengthening small businesses and production clusters.
India maintains a trade surplus of USD 1.3 billion in agricultural trade with the US, with exports of USD 3.4 billion and imports of USD 2.1 billion in 2024.
The US will apply zero additional duty on Indian exports worth USD 1.36 billion. Beneficiary products include spices; tea and coffee and their extracts; copra and coconut oil; vegetable wax; nuts such as areca nuts, Brazil nuts, cashew nuts and chestnuts; fruits and vegetables including avocados, bananas, guavas, mangoes, kiwis, papayas, pineapples shitake, and mushroom; cereals such as barley and canary seeds; bakery products; cocoa, and cocoa preparations; sesame and poppy seeds; and processed products such as fruit pulp, juices and jams.
Within this, agricultural products valued at USD 1.035 billion have been assured zero Reciprocal Tariffs to avoid uncertainty, providing stability and predictability to Indian farmers and exporters.