India-US Trade Pact: Tariffs Slashed on Billions in Exports

India and the United States have finalized a significant trade pact aimed at boosting Indian exports. This agreement will see tariffs on Indian goods valued at USD 30.94 billion reduced from 50% to 18%. Furthermore, reciprocal tariffs on an additional USD 10.03 billion worth of exports from India will be completely eliminated.

This landmark deal ensures that a substantial portion of Indian products entering the US will now face considerably lower tariffs or benefit from duty-free access. This strategic move is expected to significantly improve the price competitiveness of Indian exporters in the vast US market. Sensitive sectors have been carefully liberalized, with automobiles benefiting from quota-based access and duty reductions. Textile exports, in particular, will see a reduction from 50% to 18% tariffs, with silk items achieving zero-duty access.

The agreement also addresses other key sectors, including alcoholic beverages, precious metals, industrial products, and medical devices, through a mix of tariff reductions and quota-based entry. Agricultural exports worth USD 1.36 billion from India will face zero additional US duty, covering a wide range of products like spices, tea, coffee, and processed foods. While market access has been structured based on product sensitivity, highly sensitive items like meat and dairy remain protected. Industrial exports worth USD 38 billion will also gain duty-free access.

India's digitally delivered services exports, already a strong sector, are expected to benefit from a structured digital trade framework. This framework aims to reduce regulatory uncertainty, lower compliance costs, and create a smoother, more predictable environment for cross-border digital services. India currently ranks fifth globally in digital services exports, with this new agreement poised to further strengthen this position.